Despite the Federal Reserve’s decision to hold rates steady, consumers carrying credit card balances face continued high interest charges. To mitigate these expenses, experts recommend exploring options such as negotiating lower rates with card issuers, utilizing zero-interest balance transfer cards, or consolidating high-interest debt with personal loans.
A staggering 40 million households in the US, or 29% of the population, fall under the ALICE category (Asset Limited, Income Constrained, Employed). Despite being above the poverty line, these households struggle to cover basic necessities, and any unexpected expense can push them into poverty. Inflation has exacerbated this situation, disproportionately impacting low-income households who spend a greater share of their income on necessities such as food, rent, and gas. The Federal Reserve’s interest rate hikes have further squeezed these households, making it harder to reduce or change spending habits and rely on savings or investments. As a result, many families are increasingly turning to credit cards, leading to all-time high credit card debt and rising delinquency rates.
A recent survey of 1,000 Americans revealed that New Yorkers are facing significant financial struggles due to rising utility expenses, with the average household accumulating $766 in credit card debt. One-third have missed an electric bill payment at least once in the past year, and 14% have outstanding unpaid bills. Over a quarter of households have had to take on additional work to make ends meet, and more than half struggle with their electric bills during peak usage months. This financial burden is leaving New Yorkers feeling the squeeze and in need of relief.
While half of Americans are planning summer vacations this year, more than one-third are willing to go into debt to pay for them. However, experts warn against taking on expensive credit card debt and suggest considering alternative financing options. The top reason for not taking a summer vacation is affordability, with 65% of those surveyed citing financial constraints. Interestingly, younger generations and higher-income earners are more likely to plan summer getaways and incur debt for travel expenses. Despite the allure of social media travel photos, it’s important to prioritize financial stability and explore cost-effective local experiences.
