Credit card debt is at record high as Fed raises rates again
As the Federal Reserve raises interest rates again, credit card debt is already at a record high, and more people are carrying debt month to month, according to a report from the Associated Press.
The Fed’s interest rate increases are meant to fight inflation, but they’ve also led to higher annual percentage rates (APRs) for people with credit card debt, which means they pay more in interest.
With inflation still high, people are leaning on their credit cards more for everyday purchases. As a result, 46% of people are carrying debt from month to month, up from 39% a year ago, according to Bankrate.com, an online financial information site.
Bankrate says the average credit card interest rate, or annual percentage rate, has reached 20.4% — the highest since their tracking began in the mid-1980s.
A new poll by The Associated Press-NORC Center for Public Affairs Research finds 35% of U.S. adults report that their household debt is higher than it was a year ago. Just 17% say it has decreased. Data also shows more people are now falling behind on payments.