Americans drowning in credit card debt from chronic inflation

Published

2 years ago

May 15, 2023

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Americans are drowning in credit card debt as chronic inflation makes the cost of everyday necessities more expensive.

The New York Federal Reserve Bank's Quarterly Report on Household Debt and Credit, slated for release on Monday morning, is expected to show that credit card debt soared to a historic $1 trillion in the first three months of 2023, according to LendingTree. That will smash the previous high of $986 billion.

"I think it’s fairly clear that what we’re seeing now is becoming more and more about people struggling in the face of ongoing inflation and seemingly constant rising interest rates," Matt Schulz, the chief LendingTree credit analyst, told FOX Business. "It's a tough time." Ticker Security Last Change Change % V VISA INC. 231.38 +0.37 +0.16%MA MASTERCARD INC. 381.92 -1.47 -0.38%JPM JPMORGAN CHASE & CO. 134.10 -1.95 -1.43%BAC BANK OF AMERICA CORP. 27.09 -0.30 -1.10%DFS DISCOVER FINANCIAL SERVICES 95.22 -0.61 -0.64%

The $1 trillion figure would mark a major reversal from just three years ago when households were rapidly paying off credit card debt with the stimulus payments they received during the COVID-19 pandemic.

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The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. (Justin Sullivan/Getty Images / Getty Images)

The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. The average credit card annual percentage rate, or APR, hit a new record of 20.33% last week, according to a Bankrate database that goes back to 1985. The previous record was 19% in July 1991.

If people are carrying debt to compensate for steeper prices, they could end up paying more for items in the long run. For instance, if you owe $5,000 in debt – which the average American does – current APR levels would mean it would take about 277 months and $7,723 in interest to pay off the debt making the minimum payments.

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"It's been a really rough year for credit card holders," Schulz said. "Even though the Fed seems to be taking their foot off the gas with interest rates, the unfortunate reality is credit card holders shouldn’t expect things to get a ton better anytime terribly soon, just because interest rates aren’t going down anytime soon."

A man shops for meat at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022, as Americans brace for summer sticker shock as inflation continues to grow. (Photo by JIM WATSON/AFP via Getty Images / Getty Images)

Scorching-hot inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.

And while inflation has fallen from a peak of 9.1%, it remains uncomfortably high: The Labor Department reported last week that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.4% in April from the previous month, much faster than the 0.1% increase recorded in March.

Prices climbed 4.9% on an annual basis, more than double the pre-pandemic average.

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"People really need to make sure that they are doing what they can do to knock down their credit card debt and other high-interest debt to make sure that they are protecting themselves for the future as much as possible," Schulz said.

Politics

Man arrested over arson attacks after fire at Sir Keir Starmer’s house

Published

1 hour ago

May 13, 2025

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Man arrested over arson attacks after fire at Sir Keir Starmer's house

A 21-year-old man has been arrested over a series of arson attacks, police have said, after a fire at a house owned by Prime Minister Sir Keir Starmer.

The suspect was arrested in the early hours of Tuesday on suspicion of arson with intent to endanger life, according to the Metropolitan Police.

He remains in custody.

Emergency services were called to fires at the doors of two homes in north London within 24 hours of each other – one just after 1.35am on Monday in Kentish Town and the other on Sunday in Islington. Both properties are linked to Sir Keir.

Detectives were also checking a vehicle fire last Thursday on the same street as the Kentish Town property to see whether it is connected.

Part of the area was cordoned off as police and London Fire Brigade (LFB) investigators examined the scene.

Neighbours described hearing a loud bang and said police officers were looking for a projectile.

The prime minister is understood to still own the home, which was damaged by fire on Monday, but nobody was hurt. Pictures showed scorching at the entrance to the property.

Sir Keir used to live there before he and his family moved into 10 Downing Street after Labour won last year’s general election. It is believed the property is being rented out.

In the early hours of Sunday, firefighters dealt with a small fire at the front door of a house converted into flats in nearby Islington, which is also linked to the prime minister.

In a statement, police said: “As a precaution and due to the property having previous connections with a high-profile public figure, officers from the Met’s Counter Terrorism Command are leading the investigation into this fire.

“Enquiries are ongoing to establish what caused it. All three fires are being treated as suspicious at this time, and enquiries remain ongoing.”

The prime minister’s official spokesman said: “I can only say that the prime minister thanks the emergency services for their work and it is subject to a live investigation. So I can’t comment any further.”

Kemi Badenoch has condemned the suspected arson attacks.

Writing on X, the Conservative leader said: “This is a shocking incident. My thoughts are with the prime minister and his family. No one should face these sorts of threats, let alone people in public service.

“It’s an attack on our democracy and must never be tolerated.”

Shadow justice secretary Robert Jenrick told Sky News on Tuesday: “It’s important that the prime minister and anyone in public life has their family, their homes, protected.

“It is absolutely wrong, disgraceful, for any individual to take the kind of action that we saw against the prime minister’s home.”

UK

Man arrested over arson attacks after fire at Sir Keir Starmer’s house

Published

1 hour ago

May 13, 2025

admin

A 21-year-old man has been arrested over a series of arson attacks, police have said, after a fire at a house owned by Prime Minister Sir Keir Starmer.

The suspect was arrested in the early hours of Tuesday on suspicion of arson with intent to endanger life, according to the Metropolitan Police.

He remains in custody.

Detectives were also checking a vehicle fire last Thursday on the same street as the Kentish Town property to see whether it is connected.

Part of the area was cordoned off as police and London Fire Brigade (LFB) investigators examined the scene.

Neighbours described hearing a loud bang and said police officers were looking for a projectile.

The prime minister is understood to still own the home, which was damaged by fire on Monday, but nobody was hurt. Pictures showed scorching at the entrance to the property.

Sir Keir used to live there before he and his family moved into 10 Downing Street after Labour won last year’s general election. It is believed the property is being rented out.

In the early hours of Sunday, firefighters dealt with a small fire at the front door of a house converted into flats in nearby Islington, which is also linked to the prime minister.

“Enquiries are ongoing to establish what caused it. All three fires are being treated as suspicious at this time, and enquiries remain ongoing.”

Kemi Badenoch has condemned the suspected arson attacks.

“It’s an attack on our democracy and must never be tolerated.”

Shadow justice secretary Robert Jenrick told Sky News on Tuesday: “It’s important that the prime minister and anyone in public life has their family, their homes, protected.

“It is absolutely wrong, disgraceful, for any individual to take the kind of action that we saw against the prime minister’s home.”

UK

M&S says customers’ personal data taken by hackers

Published

1 hour ago

May 13, 2025

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M&S says customers' personal data taken by hackers

Marks & Spencer has revealed customers’ personal data has been taken by hackers after it was hit by a damaging cyber attack.

The retail giant’s chief executive Stuart Machin said the data had been accessed due to the “sophisticated nature of the incident” but stressed that this does not include “usable payment or card details, which we do not hold on our systems”.

There is also no evidence that account passwords have been shared, according to the statement.

M&S did not say how many customers had been affected but in a social media post, Mr Machin said there is “no need for customers to take any action”.

“To give customers extra peace of mind, they will be prompted to reset their password the next time they visit or log on to their M&S account and we have shared information on how to stay safe online,” he said.

M&S had 9.4 million active online customers in the year to 30 March, according to its last full-year results.

A cybersecurity expert told Sky News, however, that the lack of sensitive data being shared “does not mean that customers are not at risk”.

“With simple data such as names, email addresses, and potentially other personal details like addresses or phone numbers, which have been reported as accessed, attackers can use this information to create highly targeted and convincing phishing emails or text messages,” said Tim Grieveson, CSO at ThingsRecon.

“These emails from attackers can appear very legitimate because they use real personal information.”

He added that stolen personal data can be used “as pieces of a puzzle by fraudsters”.

“For example, if an attacker has your name and address, they might combine it with other publicly available information to attempt to open accounts or conduct other fraudulent activities.”

M&S has been struggling for weeks after hackers, reportedly from the Scattered Spider group, attacked their networks.

The British retailer was forced to halt recruitment amid the ongoing attack that became apparent on Easter Monday.

Shelves around the country have been bare and customers are unable to shop online.

Agency staff at some distribution centres were also told to stay at home because of the attack.

Last week, an M&S insider told Sky News it could be “months” before the retailer fully recovers from an ongoing, severe cyber attack – and that the company had no plan for such an incident.

An employee at M&S’s head office, who spoke to Sky News on condition of anonymity, said that last week had been “just pure chaos”.

“We didn’t have any business continuity plan [for this], we didn’t have a cyber attack plan,” the source said.

“In general, it’s lots of stress. People have not been sleeping, people have spent their weekends working, people sleeping in the office – just reactive response.”

The Co-op also faced a similar major incident and was forced to apologise after hackers managed to access the data of a “significant number” of past and current members.

In the same week, luxury department store Harrods also suffered an attempted hack and temporarily restricted internet access across its sites as a precautionary measure.

The National Crime Agency has said it is investigating the attacks individually but is “mindful they may be linked”.