PORTLAND, Ore. (KOIN) – 2023 continues to be an expensive year for families as interest rates remain high and as officials say credit card balances in the United States have tipped the $1 trillion mark for the first time.
MoneyTips Senior Finance Industry Analyst Nathan Grant explains that high interest rates and accumulating debt is impacting Americans in several ways — including increased loan repayments.
“Borrowing cost is going up not just for new credit and new loans but also for people who have things like variable rate loans, or adjustable-rate mortgages, student loans that are affected by this, they’ll see an increase in monthly payments,” Grant said.
Additionally, Grant says people may see higher mortgage rates, adding, “the housing market might be slowing down because people are less likely to be buying a house right now.”
According to Grant, consumer spending will also be affected.
“People are going to try to save money where they can so, that means economic sectors that are tied to consumer spending are going to feel the sting as well,” Grant explained.
“What we really need to focus on is what is in your control. Everybody’s situation is unique and hearing things like inflation and increased rates, those are things that are kind of outside of the scope of what the individual can do,” Grant said.
“What you want to do, is focus on improving your credit scores, saving – because if an emergency comes up, and you know it will, you want to turn to that rather than your high interest credit cards that a lot of people tend to lean to,” Grant suggested.
Grant also advises consumers to work towards paying down high interest debt.
“Now is more important than ever to do that because interest charges month-to-month are going to be putting a strain on the average consumer every month and you really want to try to beat that head on.”