U.S. consumer delinquencies increase for credit card, auto loan payments

LANSING, Mich. (WILX) - From the gas station to your credit card payments, family budgets take a hit as inflation continues to rise.

According to the experts, more consumers are falling behind on payments and the trend is expected to worsen. The Federal Reserve reported that more people are ditching their credit card bill and car loan payments as the cost of just about everything is still going up.

As a result of high prices and high interest rates, millions of people are robbing Peter to pay Paul, and making hard decisions on which bill is more important to pay.

“Your grocery bill went from $100 a week to $300 a week. Or your gas bill went from $30 to fill up to $60 to $75 to fill up,” said Wealth strategist, Kelly Ann Winget.

After dealing with high rent prices and an unsafe living situation, Kelsey Brianne had to leave her home. “I was paying a pretty high amount.”

She said really leaning into her community helped get her overcome. “They’re just really incredible and when you are facing budget issues, when you are facing housing insecurity, really leaning on that support system. And I know, for myself, if I was not as integrated to my community and had such a strong support system, I don’t know what would have happened.”

Brianne organized a group of protesters called Rent Is Too Darn High.

Consumer spending experts like Kelly Ann Winget and Florise Neville-Ewell said this ongoing trend is leaving families to make hard decisions.

“Do I pay my credit card bill this month? Or do I buy food for my family,” said Winget.

“When it comes to your mortgage, you cannot miss that payment,” said Neville-Ewell.

According to the Federal Reserve, the number of people that are missing credit card and car payments has increased. Both higher than pre-pandemic levels. “Inflation keeps going up because people are still willing to pay the inflated price whether they can or not,” said Winget. She said consumers are deciding whether to pay off their debt or save money for a rainy day.

Neville-Ewell, a professor at WMU Cooley Law, said cutting back on spending will cause a decrease in inflation rates. She has tips for people to keep in mind.

“Identify all of your bills. Make a budget. Check your interest rates on credit cards. Find a way to save money and deposit it into those high yield savings accounts. And number five, make adjustments.”

A few more tips consumers can use to dig out of debt include:

• Always making more than your minimum payment.
• Using cash instead of cards.

According to the Washington Post, more shoppers are using the buy now, pay later option. Another sign of just how squeezed consumers have become since the pandemic.

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