The United States is facing many economic challenges. Inflation is at a 40-year high. Earlier in the year, the inflation rate was over 8%. In January, it slowed to 6.4%; however, that is still over three times the Federal Reserves targeted rate. In responses, the Fed has raised interest rates many times over the last year to slow the rate of inflation. These rate hikes make all types of borrowing more expensive. As mortgage rate have increased, home sales slow down. We are not seeing as many potential buyers bidding on homes, so price inflation goes down.

Another area where rising interest rate increases financial pain is in credit card rates, which are already some of the highest. Over the last three months of 2022, rates averaged 21.6%, according to Wallet Hub. That is a jump from 18% a year earlier. For consumers not paying their balance in full, this can be very expensive. If your account becomes delinquent, rates could jump another 10%.

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