(RoyalPatriot.com )- As the cost of living rises, more and more people are turning to credit cards to make ends meet, as shown by previous studies.
This is despite price increases. Customers are still making purchases, although at a slower rate than they did a year ago, and dumping the cost onto their credit cards.
According to a recent study by LendingClub, 60% of working-age Americans and 45% of those with high incomes lived paycheck to paycheck in January. This is down from 64% a year ago, demonstrating that some consumers’ financial conditions have improved due to last year’s expenditure cuts.
Certain spending habits are hard to overcome, as last Friday’s reading of the core personal consumption expenditures index was hotter than predicted. Monthly consumer expenditure increased by 1.8%, more than the forecasted increase of 1.4%.
The newest research from TransUnion shows that by the end of 2022, credit card debt had reached a record $930.6 billion, an increase of 18.5% from the previous year, and the average credit card amount had risen to $5,805.
The Federal Reserve Bank of New York also revealed that total household debt rose by 2.4% to $16.9 trillion in the fourth quarter of last year.
A new study by Bankrate.com shows that 46 percent of all credit card customers now carry a balance from one month to the next, up from 39 percent in the previous year.
More than a third of Americans have credit card debt; senior industry analyst at Bankrate Ted Rossman recommends utilizing a portion of your tax return to pay off this high-cost debt.
Ted Jenkin, CEO and founder of oXYGen Financial in Atlanta and a CNBC’s Financial Adviser Council member, provides further advice for increasing savings.
To maximize your interest earnings on bonds, Jenkin suggests purchasing short-term, low-risk Treasury bonds and “laddering” them to maturity.
He said that “you are not going to lose your money,” despite the modest rate of return.
Instead, you may put your money into bonds issued by the federal government, which protect you from inflation while being almost risk-free.