According to an Associated Press story, citing two years of inflation, Americans held more than $1.05 trillion on their credit cards in the third quarter of last year. That eye-popping figure will likely grow in March when fourth-quarter data, the last four months of 2023, is released by Federal Deposit Insurance Corp, or FDIC.
The average interest rate on a bank credit card is 21.5%, the highest since 1994, the AP said, which is a long way from those zero-interest promotions that show up in the mailbox.
Joel Griffith, who studies economics at The Heritage Foundation, tells AFN everyone should be concerned about U.S. credit card debt.
“Not just because it harms our neighbor,” he explains, “but because if people have to go into bankruptcy, or have to divert more of their family income just to making those payments, that will be a drag on overall economic growth."
Biden blames 'shrinkflation' for Super Bowl snacks
Americans up and down the economic ladder have been walloped by inflation, which sent everything from gas to groceries soaring in 2021. Inflation peaked at 9% in June 2022, now a year and eight months ago, and consumer prices have remained high which is why the credit cards have come out.
So-called “core inflation” has risen 3.9% over the last year, according to a second AP story about the economy, but that figure excludes food costs and the electric bill.
All totaled, average prices are up 19% since Joe Biden took office, the AP story acknowledged.
Yet the Democrat president, now seeking a second term, is campaigning that his "Bidenomics" has improved the U.S. economy since the COVID-19 pandemic.
On Sunday, prior to the Super Bowl, Biden's staffers aired a Twitter video featuring the ailing president. Biden blamed companies for so-called "shrinkflation" that affects the portion size of potato chips and other snacks people purchased for Super Bowl parties.
Shrinkflation, however, is the result of inflation which is caused by the federal government borrowing money - much like a credit card swipe.
The two credit cards held by most middle-class families are Synchrony Bank and Discover, according to the AP story. The number of defaulted accounts at Synchrony jumped from 3.5% to 5.6% in a year, and 4.7% of its credit card holders are 30 days or more behind on paying their bill.
Payment statistics for Discover customers show they are struggling, too, and the company’s current balance of $102 billion is a 13% jump from last year.