Highlights

  • People are leaning on their credit cards more and more for everyday purchases
  • Using a credit card can provide protection for people who can pay off the balance every month. But the cost for those who can't, is high

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Credit card debt in the U.S at a record high; here's why

Last three months of 2022, credit card balances in the U.S. increased by $61 billion to $986 billion, surpassing the pre-pandemic high of $927 billion, according to the Federal Reserve Bank of New York 

Credit card debt in the U.S at a record high; here's why

Amid the Federal Reserve raising interest rates once again by 25 bps, credit card debt in the U.S has climbed to a record high.

The Fed's interest rate increases are meant to fight inflation, but they've also led to higher annual percentage rates (APRs) for people with credit card debt, which means they pay more in interest.

With inflation still high, people are leaning on their credit cards more for everyday purchases.

“It's the economy, inflation, gas prices, and food costs,” said Lance DeJesus, 46, kitchen manager at the Golden Corral in York, Pennsylvania.

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