February 1, 2023

Market and Financial News

Market and Financial News Aggregator

Inflation has Americans turning to loans, credit cards to cope. Does it pose big risks?

2 min read

Linda Hampton was already struggling to pay her credit card bills in 2021 because of business expenses. Then soaring inflation pushed her to put everything on credit. She has since been able to trim her balance.

Linda Hampton was already struggling to pay her credit card bills last year because of thousands of dollars in expenses from her notary business.

Then inflation began skyrocketing in mid-2021, especially gas, utility and grocery prices.

“I just started using my credit card for everything,” Hampton says, even for a combined electric, natural gas and water bill that has more than doubled since 2020 and hit $864 last month.

At one point, Hampton, who earns about $36,000 a year as a property leasing manager in Memphis, Tennessee, saw her credit card debt surge to $22,000 and she was making more than $1,500 in monthly payments.

“That was very stressful,” she says. “A lot of times, I didn’t sleep. … It was affecting my sleeping, my eating, my psyche.”

Consumer borrowing is surging as inflation hovers near 40-year highs and Americans resume pre-pandemic activities like traveling and dining out, posing risks for lower-income borrowers.

Corporate greed?Critics say it’s making inflation worse, pointing to record profits despite rising costs

Path to equity: Bitcoin meant equity for Black, LGBTQ+ investors. Where does the Crypto Crash leave things?

Is credit card debt a problem?

A growing share of those cash-strapped households are behind on payments for car loans, credit cards and personal loans, a development that’s intensifying their angst and could prompt lenders to make fewer loans to that group.

Total household debt is still historically low, but debt payments have edged up recently to 9.3% of personal disposable income in the fourth quarter, according to the Federal Reserve. By comparison, debt payments comprised 9.9% of income in late 2019, just before the pandemic, and 13.2% in 2007, prior to the Great Recession

During the health crisis, U.S….

2022-06-05 20:49:44

All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator

Read more from original source here…

Leave a Reply

Copyright © All rights reserved. | Newsphere by AF themes.