Americans are carrying more debt than ever before, with COVID-19 savings long gone and as rising interest rates and ongoing inflation continue to eat into household budgets.
credit card interest rates hit record highs
, Rossman noted. Additionally, more consumers are shopping with credit cards and with digital payments as opposed to cash. Lower-income Americans, in particular, are likely putting some essentials on credit. This group already chewed through any savings built up"They are hit harder by inflation because there is less money to go around and their budgets are already limited to necessities to begin with, so there is not as much to cut," Rossman said. Americans paid down a large chunk of their credit card debt in 2020, in the depths of the coronavirus pandemic.
"We saw a huge paydown of debt during the pandemic when there weren't a lot of thing to buy or people to see," she told CBS MoneyWatch."But we've seen incredible demand since the peak of , coupled with record-high inflation. So the combo there, of people now taking trips they'd put off, plus the cost of goods and services increasing, is driving debt."
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