America's dependence on credit cards is growing. The Fed's rate hike will make it more painful | CNN Business

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By making it more expensive to borrow, the Federal Reserve hopes to cool demand and tamp down inflation. But hiking rates also means people have to pay more to service debt they already have.

As prices continue to rise, Americans are becoming increasingly reliant on credit cards to make purchases. And now, with the Federal Reserve’s latest three-quarter-percentage point hike, many of them will be paying more for the debt they’ve been accumulating.

However, she acknowledged that the rapid adoption of Buy Now, Pay Later plans, which typically aren’t captured in conventional banking and consumer credit reporting, could be obscuring the true picture of some debtors’ positions. “It takes years to accumulate behaviors of new products like BNPL to accurately analyze them and incorporate them into consumer credit scores and credit decisions,” she said.

 

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