Credit cards

Americans rely on credit cards to ease the pain of inflation and spend all summer

Credit card debt is skyrocketing as Americans try to navigate their way through economic turmoil and battle runaway inflation.

Plastic card debt now accounts for about $890 billion of the $16 trillion in US household debt.

Household debt rose 2% in the second quarter of this year, and while most of the increase was due to mortgages, consumers racked up a record $100 billion in credit card debt over the past of last year, according to Bloomberg News.

The 13% jump in credit card debt from a year earlier was the highest in more than 20 years, the Federal Reserve Bank of New York said, raising concerns about delinquency.

About 42 million new credit card accounts have been opened since the start of the pandemic.

“If your expenses start to exceed your income. What are you doing? Looking for a relief valve through borrowed money,” tweeted investor Peter Tarr.

Americans rely on credit cards to keep them out of spiraling costs for everything from food to gasoline.

In some cases, people are replacing purchases of goods with splurges on travel and experiences.

Credit cards cover costs through debt, but they also offer rewards that can provide a cushion against soaring costs for summer travel and other expenses.

A Wells Fargo survey from late June found that nearly three-quarters of Americans (71%) have a credit card that offers rewards, and 45% of those cardholders say their credit card usage increased during the pandemic.

Two-thirds of rewards cardholders (65%) say they care about credit card rewards more than ever.