Rising Costs and Debt Burden Consumers Despite Wage Gains

"Everything is more expensive. Debt, rent, food, gas—everything," says Charlie Wise, senior vice president at TransUnion. "Even with healthy wage gains, many consumers can't keep up with price pressures."

Maxed-out borrowers are a growing concern. The New York Fed reports that nearly 1 in 5 cardholders uses at least 90% of their credit limit, raising the risk of delinquency. This issue is especially prevalent among people under 30 and those in low-income neighborhoods.

Credit card balances reached $1.115 trillion in the first quarter, with 44% of borrowers carrying debt month to month. High interest rates, averaging over 20%, can trap consumers in long-term debt cycles. Rising credit card delinquencies are concerning despite a strong labor market and low unemployment, signaling potential financial instability ahead.

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