CLEVELAND — Inflation may have eased slightly, but household debt is still on the rise. That includes liabilities like car payments, credit cards, and mortgages.

Michael Goldberg, a finance professor at Case Western Reserve University, said the long-term effects of household debt is unclear.

What You Need To Know

  • Inflation is slowing down, but household debt is on the rise 

  • Household debt includes things such as credit card bills and mortgages 

  • How this could affect the economy long term is unknown, but people are struggling regardless

“The economy tends to be cyclical. I think well there’s some fear that we may be heading into recession, there are other economists who think that we’re sort of working our way through this,” he said. 

Nerdwallet.com conducted a recent survey that showed Americans carried an average of $17,066 in credit card debt last year, which is more than 15% more than 2021. Goldberg said that credit card debt has always been an issue.

“Credit card debt has been something that’s been around for a long time and I think folks are just feeling it a bit more now because of higher interest rates,” he said.

Despite the economy’s future being unknown, Goldberg said that people are still struggling.

“I think it’s often difficult for people to take a long-term view that the economy will improve because they’re feeling the pain in the present day,” he said.

Goldberg gave some input on how to alleviate some of your household debt.

“Individuals make decisions on consumption. And I think for folks it may be eating out less, it may be shopping less or traveling less as their savings dwindle,” he said. 

The survey reported that households that carry credit card debt will pay an average of $1,380 in credit card interest this year, assuming interest rates remain the same.