‘I exhausted my savings’: Inflation has Americans turning to loans, credit cards to cope. Does it pose big risks?

Written by on June 1, 2022

Inflation has low-income households taking dangers with loans, credit score

Decrease-income People are counting on bank cards to make ends meet.

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.
  • Shopper borrowing is surging as inflation hovers close to 40-year highs and People resume pre-pandemic actions like touring and eating out.
  • A rising share of these cash-strapped households are behind on funds for automobile loans, bank cards and private loans.
  • Whole family debt remains to be traditionally low.

Linda Hampton was already struggling to pay her bank card payments final 12 months due to hundreds of {dollars} in bills from her notary enterprise.

Then inflation began skyrocketing in mid-2021, particularly gasoline, utility and grocery costs.

“I simply began utilizing my bank card for all the things,” Hampton says, even for a mixed electrical, pure gasoline and water invoice that has greater than doubled since 2020 and hit $864 final month.  

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