An increasing number of consumers in the United States used credit cards in 2022 to cover the rising costs of food, rent and other necessities, propelling the total credit card debt to a record $930.6 billion - an increase of %18.5% from the previous year, the credit card reporting bureau TransUnion said a report on Friday
WASHINGTON (Pakistan Point News / Sputnik - 03rd February, 2023) An increasing number of consumers in the United States used credit cards in 2022 to cover the rising costs of food, rent and other necessities, propelling the total credit card debt to a record $930.6 billion - an increase of %18.5% from the previous year, the credit card reporting bureau TransUnion said a report on Friday.
"On the heels of another (interest) rate hike this week by the Federal Reserve, credit card annual percentage rates are already near 20%, on average, and set to climb even higher," the report said. "At the same time, more consumers are leaning on credit to afford increasingly expensive necessities, like food and rent. That helped propel total credit card debt to a record $930.6 billion at the end of 2022, a 18.5% spike from a year earlier."
The average balance increased to $5,805 over the same period, the report said.
"Whether it's shopping for a new car or buying eggs in the grocery store, consumers continue to be impacted in ways big and small by both high inflation and the interest rate hikes implemented by the Federal Reserve," TransUnion Vice President Michele Raneri said.
Financial experts and observers have warned that delinquencies increased as lenders opened access to credit users who for a number of reasons were not able to keep up with credit payments.
Financial experts have also said the options available to struggling consumers include zero-interest credits cards or refinancing credit cards into a lower-interest personal loans, according to reports.
