As Americans continue to try to cope with surging prices, they are turning more and more to plastic to pay from everything from groceries to luxury indulgences.
The post-pandemic urge to splurge has not abated as inflation eats away at consumer spending power.
In just one year, the amount of debt U.S. consumers have transferred to credit cards has increased by a whopping 17% to a record $988B, according to the Federal Reserve Bank of New York.
And as America’s total plastic debt nears the dreaded $1T milestone, many consumers are reluctant to pare back on discretionary lifestyle purchases even in the face of exorbitant prices.
Compounding the issue are interest rates, which now average more than 20%, making keeping up on servicing credit card debt even more costly for consumers,
The total U.S. household debt surpassed $17T in the first quarter of 2023.
This unregulated consumer spending has kept a long-predicted recession at bay for now, but sooner or later squeezed budgets are going to lead to cut into the credit card spending and consumers will be left buried under Papa Plastic.
