US Credit Card Debt on the Rise: Challenges for Low-Income Households

Thursday, 22 August 2024, 08:04

US credit card debt is rising significantly as housing and other costs remain high for the lowest earners. Recent data reveals that total credit card balances have increased by 5.8% year-over-year, reaching $1.14 trillion. The ongoing trend of rising credit card delinquency is particularly alarming, especially for those with limited income. This situation highlights the urgent need for financial strategies to manage debt effectively.
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US Credit Card Debt on the Rise: Challenges for Low-Income Households

US credit card debt continues to climb, presenting challenges for many, especially the lowest earners. In a recent report from the New York Fed, total credit card balances have surged 5.8% year-over-year, now totaling $1.14 trillion.

The Impact of Rising Costs

For low-income households, housing and other living expenses exacerbate the challenges of rising debt levels. As costs remain persistently high, many are finding it increasingly difficult to manage their credit card payments.

Delinquency Rates Increasing

  • Equifax data through June indicates a significant rise in credit card delinquency rates.
  • This trend poses a risk not only to individual finances but also to the broader economy.
  • Increased delinquency rates raise concerns about potential impacts on credit scores.

Strategies for Managing Debt

In light of these developments, it’s essential for individuals to adopt effective debt management strategies. Some practical steps include creating a budget, prioritizing high-interest debts, and seeking financial counseling when necessary.

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This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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