Consumer debt in the U.S. continues to soar.
A report from the Federal Reserve shows Americans had a combined debt of $4.82 trillion in February. That's an increase of about $15 billion since January.
Consumer debt has steadily increased year-over-year, with one exception: 2020. That's when much of the world began implementing travel restrictions due to the pandemic.
In 2020, Americans paid down their combined debt to $4.18 trillion. However, it grew to $4.43 trillion in 2021 and $4.78 trillion in 2022.
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Somerville, Massachusetts, is looking to use funding from the American Rescue Plan to help residents pay off medical debt.
Rising debt coincides with inflation, which the U.S. is facing.
Food costs increased 9.5% in the 12-month period ending in February. The price of shelter in the U.S. is up 8.1% in the last year, according to the government’s data.
The Federal Reserve has continued to increase interest rates in an effort to cool inflation. However, rising interest rates also make it tougher for people to pay off certain debts, such as credit cards.
The interest rate now stands at 4.75%–5%, its highest mark in 15 years.
Americans owe about $1.22 trillion in revolving lines of credit, which include credit cards. Non-revolving lines of credit, which would include auto loans and mortgages, account for about $3.6 trillion of combined consumer debt in the U.S., according to the Federal Reserve.
Report: Gen Z accumulating debt faster than other generations
Generation Z had, on average, more than $16,000 of debt at the end of of 2022. That's an increase of 3% from earlier in the year.
