Credit Card Crisis: Fed Warns of Highest Consumer Distress in 12 Years

Consumer financial distress is at its worst level in 12 years according to the Federal Reserve Bank of Philadelphia, with over 11% of Americans making only minimum payments on credit cards and delinquencies hitting record highs.

This crisis stems from years of above-target inflation that has outpaced wage growth, forcing many to rely on credit cards for essential expenses.

A recent survey found one-third of Americans use credit cards to make ends meet, with many maxing out their cards. With interest rates averaging 21.37%, minimum payments barely cover interest charges.