What a difference a few years make.
Prior to the COVID-19 pandemic, inflation was dormant and most of us had plenty of room in our budgets to pay for groceries, gas and many other necessities.
But making ends meet has gotten much tougher in recent years. And new data from credit-reporting agency TransUnion reveals the toll of higher costs on our financial well-being.
Here are some new signs that Americans’ spending is increasingly out of control.
Credit card balances now top $1 trillion
In the second quarter of this year, total credit card balances in the U.S. reached $1.05 trillion, TransUnion reports, marking the third consecutive quarter in which they exceeded the trillion dollar mark.
The climb has been steady, from $707 billion in the second quarter of 2021 to a record high of $1.14 trillion earlier this year.
Average credit card debt is approaching $6,500
The typical American also is deeper in credit card debt. The average balance sat at $6,329 in the second quarter, TransUnion says.
That is up from $5,947 in the second quarter of 2023 and just $4,828 in the second quarter of 2021.
More than 170 million of us carry a balance
Back in the second quarter of 2021, 152.9 million Americans carried a balance on their credit card from month to month. That was a depressing number, considering the high interest rate that accompanies credit card debt.
Things have only gotten worse, with 170.1 million carrying a balance in the second quarter of this year.
The delinquency rate is rising
As of the second quarter, 2.26% of credit card borrowers were at least 90 days past due on their payments.
That is more than double the 0.95% who were past due in the second quarter of 2021.
How to get out of debt fast
It is likely that soaring inflation is contributing to Americans’ deteriorating spending patterns. Unfortunately, you can’t just wish away higher prices.
However, even if you cannot change the direction of the wind, you can adjust your sails.
A couple of years ago, Money Talks News founder Stacy Johnson offered some good tips for coping with higher costs in his podcast “Inflation Is Surging: 20 Ways to Fight Higher Prices.”
And if you have fallen out of your boat and are drowning in a sea of debt, you will find a life preserver in “8 Surefire Ways To Get Rid of Debt ASAP” and “7 Great Tools to Help You Get Out of Debt.”
