Americans have accumulated a record $1 trillion in credit card debt.
Meanwhile, the Fed's interest rate hike caused average credit card interest rates to soar above 22%. Interest rates on retail credit cards are even higher, averaging close to 29%.
Ted Rothman, a senior industry analyst at Bankrate.com, said, “Even if you work and wages have gone up, prices of everything such as rent, groceries, gasoline, etc.” “So people don't feel like they're improving.”
Major retailers such as Macy's and Nordstrom have issued warnings that credit card repayments will slow down in summer. This phenomenon highlights the potential risks to US retail revenue this year's holiday season. The resilience of American consumers will continue to be tested by continued rising prices for groceries, gasoline, and housing, not to mention student loan repayments.