Angelou Liberta Coletta shops at an H-E-B grocery store in Houston in December 2022. Inflation has receded considerably from its peak, but many still struggle with poverty.The consumer purchases that kept the United States economy chugging along in 2022 was juiced by rising debt, including a record level of credit card spending, according to a new report from the Federal Reserve Bank of New York.
Notably, credit card balances increased by $61 billion to reach $986 billion — above the pre-pandemic high of $927 billion and a new record.Gas prices are up, used cars prices are down: Here's how inflation affected prices in January. "For a while, Americans took advantage of stimulus payments and the fact that they were spending less due to pandemic concerns to make major progress paying down their credit card debt," says Ted Rossman, senior industry analyst for Bankrate, a personal finance site.
Inflation now seems to be cooling, thanks to a series of interest-rate hikes from the Federal Reserve since March 2022. But those interest-rate hikes have also had the result of pushing up annual percentage rates on credit cards, meaning that consumers turning to plastic risk being squeezed both at the time of purchase and when the bills come due.
Experience one personal bankruptcy and you'll never have a desire to accumulate a credit balance again. I have no use for the things. Spend less money than you earn. It really is that simple.
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