TAMPA, Fla — Americans are racking up more credit card debt than ever before. Anew Federal Reserve Bank of New York report showed credit card debt has reached more than $1 trillion.
"I am not comfortable saying this is no big deal. It's a really big deal," Victor Claar, Associate Professor of Economics, said.
Claar said consumer confidence, rising interest rates, and inflation is to blame for booming credit card debt.
"It's been hard. I had to stop using one credit card at one bank then use another because I can't pay for the other one, so I had to stop using it altogether and use cash," Walter Barnes, credit card user, explained.
Barnes said he's had to cut it up his credit cards so he isn't pressured to spend it every time he puts money back on it.
"Avoid incurring the charges in the first place. There's no way to get in trouble paying your credit card bill if you don't have a credit card bill in the first place," Claar explained.
Claar said credit cards should be used for emergencies unless you have the money and know how to budget.
"I use mine a lot for monthly bills and for traveling. It's just for convenience. It's easier to use the credit card, and when the bill comes in, just pay it off," Bonnie Poff, credit card user, explained.
However, not everyone is doing that. Late payments have also risen. According to that same report, 7.2 percent of credit card accounts in the second quarter were 30 days overdue. It's the highest level in 11 years.
"It takes more dollars to buy the same stuff. If you carry a balance, the interest rate is higher than it's been before. When you carry any balance at all, then it costs you more to buy that good or service," Claar explained.
Claar said Gen Z's are racking credit card debt faster than anyone else.
"If you're in that position, and you're struggling, the simplest thing to do is call your credit card company and see if you can work out a payment plan," Claar added.
