Credit card issuers charged $12 billion in late fees in 2020, while the average global debt level per individual increased the following year.
SEATTLE — From gas to groceries, families in western Washington and across the country are being forced to stretch their dollars.
The U.S. annual inflation rate is 8.6% for the 12 months ending May 2022, the largest annual increase since December 1981 and after rising 8.3% previously, according to U.S. Department data of work published on June 10.
Rising inflation is only part of the current challenge for Americans. According to a Consumer Financial Protection Bureau (CFPB) report, credit card issuers charged $12 billion in late fees in 2020.
Late fees and credit card interest add to consumer borrowing debt, but according to Experian, mortgages and auto loans, by far the two largest components of a consumer’s budget, have experienced the fastest year-over-year growth of any debt category. Experian’s third quarter 2021 report found that consumer debt balances rose 5.4% to $15.31 trillion, an increase of $772 billion from 2020.
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“During the pandemic, people were able to use the extra money they might be getting to make sure they were sticking to their payments and working to get out of debt,” said Seattle-based director of strategic initiatives Becky House. for American Financial Solutions. ” Now it’s over. They fight. We see the increase in gas prices, the increase in food costs that really take a bite out of the income that people have to make those payments. »
Missing payments can have a huge impact on a person’s credit rating, according to House, who said a personal budget review needs to be done to get someone back on track.
If necessary, House recommends seeking professional debt management help, available free of charge from several nonprofits.