GREENVILLE, N.C. (WITN) – Financial experts say many Americans have run up their credit card balances and wiped out their savings after battling inflation for more than two years.
According to the Federal Reserve, outstanding credit card balances have reached an all-time high, and lower and middle-income Americans, who tend to be renters, are falling behind on their debts to pay for everyday living expenses.
Talia Hoffman says she tries to use hers wisely.
“I have one, it’s a travel credit card, it’s been kind of useful because I got it when I was gonna travel abroad, so I racked up some points that way – but I’m always like really careful to use it,” says Hoffman.
According to the Bureau of Labor Statistics, Americans held more than a record one trillion on their credit cards in the third quarter of 2023, and that number is expected to grow once fourth-quarter data is released by the Federal Deposit Insurance Corporation next month.
ECU Economics Professor Lester Zeager says those who are facing a major impact are people who don’t own their homes.
“Landlords want to preserve the purchasing power of that income stream that they get from rental housing – and they raise the rental rate along with all the other prices that are going up,” says Zeager.
Financial experts say a loaf of bread that cost $1.54 in December 2020 cost $2.02 two dollars at the end of last year…and a gallon of gas has risen from an average of $2.17 to $3.29 in the same timeframe.
Hoffman says everyone should try to make smarter decisions to maintain a good credit history.
“If you’re gonna pay it back a little a week just kind of, you know, make more than minimum payments if you can. I know for some people that’s not, but try and keep up with it as best you can and that’s it” says Hoffman.
Financial experts say in addition to lower and middle-income Americans, those who have recently resumed paying off student loans are also impacted.
Officials say inflation reportedly peaked at 9.1% in June 2022 and is now slightly above 3% and the costs of many goods and services remain elevated.