Americans are drowning in credit card debt as stubborn inflation makes the cost of everyday necessities more expensive.
"I think it’s fairly clear that what we’re seeing now is becoming more and more about people struggling in the face of ongoing inflation and seemingly constant rising interest rates," Matt Schulz, the chief LendingTree credit analyst, previously told FOX Business. "It's a tough time."
The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. The average credit card annual percentage rate, or APR, hit a new record of 20.53% last week, according to a Bankrate database that goes back to 1985. The previous record was 19% in July 1991.
If people are carrying debt to compensate for steeper prices, they could end up paying more for items in the long run. For instance, if you owe $5,000 in debt — which the average American does — current APR levels would mean it would take about 309 months and $21,537 in interest to pay off the debt making the minimum payments.
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