SEATTLE — From gas to groceries, families in western Washington and across the nation are being forced to stretch their dollars.
The annual inflation rate for the United States is 8.6% for the 12 months ended May 2022, the largest annual increase since December 1981 and after rising 8.3% previously, according to U.S. Labor Department data published June 10.
The rising inflation rate is only part of the current challenge to Americans. According to a report by the Consumer Financial Protection Bureau (CFPB), credit card issuers charged $12 billion in late fees in 2020.
Credit card late fees and interest add on to consumers’ borrowing debt, but according to Experian - mortgages and auto loans, by far the two largest components of a consumer's budget, experienced the fastest year-over-year growth of any debt category. Experian’s Q3 2021 report revealed Consumer debt balances increased by 5.4% to $15.31 trillion, a $772 billion increase from 2020.
“During the pandemic, people were able to use the extra money they may have been receiving to make sure they stay up on their payments and were working on getting out of debt,” said Becky House, the Seattle-based Director of Strategic Initiatives for American Financial Solutions. “Now, that’s over. They’re struggling. We see the increasing gas prices, increasing cots of food that really takes a bite out of income people have to make these payments.”
Missing payments can drastically impact a person’s credit score, according to House, who said a personal budget review needs to be done for someone to get back on track.
If necessary, House recommends seeking professional debt management help which is available for free from several nonprofit agencies.