Why you should not put charges on your credit card amid today’s high inflation


According to the latest data from the Federal Reserve Bank of New York, Americans’ credit card debt as of June 2022 is a staggering $887 billion.

That’s an increase of about 5.5% from the first quarter of the year — and a 13% increase from the year-ago period.

But even this surprisingly high number doesn’t seem to deter some people from using credit cards.

Amidst today’s high inflation, many Americans continue to rack up credit card debt to cover their expenses and pay their bills.

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Personal finance professionals warn of this.

“I understand – first of all [we had] a pandemic and now record inflation,” said Rachel Cruze, financial expert, New York Times #1 bestselling author and host of The Rachel Cruze Show.

She is also a Ramsey Solutions expert and a daughter of Dave Ramsey.

“And I see a lot of people are struggling to cover expenses that they could afford just a few months ago. And that’s a scary place,” Cruze told FOX Business this week.

But “regardless of where you are financially, a credit card isn’t the answer,” Cruze said. “Especially when it comes to living expenses.”

“If you’re using a loan for everyday necessities and expenses, you risk spending a lot more than cash.”

Cruze pointed out that “if you use credit for everyday things and expenses, you risk spending a lot more than you would with cash.”

“And that debt can easily pile up faster than you intended.”

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Cruze offered words of wisdom and common sense.

“I want people to know that it’s possible to live – even now – without credit cards.”

Here’s how.

Credit card

Financial expert Rachel Cruze says that in these tough economic times, “it’s possible to live without credit cards.” (iStock / iStock)

3 clever tips to reduce credit card use

“Personal finance is 80% behavior and only 20% mental knowledge,” Cruze said.

1. “So step one is breaking the habit of stealing a credit card. taking debt off the table.”

2. “Then go on a zero-based budget and cut where you can while looking for ways to generate more income,” she said. “Remember, these are short-term sacrifices.”

3. “Third, you’re living on less than you earn,” Cruze said.

“It’s another change in behavior,” she said. “You’re choosing not to ‘buy’ what you can’t pay for right now. This may mean buying different items or shopping in different stores, but it will be worth it.”

Still not convinced that using credit cards to pay for everyday household expenses isn’t wise?

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According to a recent Bankrate.com survey, the average credit card rate is at its highest level in decades — and it could get higher.

credit card usage

Financial expert Rachel Cruze says, “No matter where you are financially, a credit card is not the solution.” (iStock / iStock)

Bankrate noted in early September that the average credit card rate hit a record high of 17.96%.

According to Bankrate.com, that rate is up 3.5% from about a month ago and 10.8% from a rate of 16.21% about a year ago.

In addition, “Fed Chair Jerome Powell has made it clear that the Fed is far from done raising rates,” said Ted Rossman, a senior industry analyst at Bankrate.com, in a statement, which the Bankrate Results accompanied early September.

Fox News Digital’s Megan Henney and Aislinn Murphy contributed to this report.



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