Inflation forcing Americans to stop paying down debt

Photo credit Getty Images
By , Audacy

Barely making ends meet. Having to choose which bills to pay each month. Ignoring paying down debt. Does this describe you or someone you know? Experts say more people are feeling the effects of drastic rises in inflation.

A new report published by Morgan Stanley states that more than 1 out of every 4 Americans (26%) have stopped paying down debts and loans because of inflation.

Still others have had to cut contributions they would normally put into avenues toward saving, options like health savings accounts, long-term savings, and their 401(K) plans.

Other debts that some Americans are being forced to ignore include credit cards and student loans.

Of course, with the possibility of economic recession looming, it could become even harder for consumers to pay off those debts, especially because the Federal Reserve’s measures to stave off that recession have included mainly the aggressive increase of interest rates.

Those rising interest rates directly impact various lines of credit, like credit cards and home equity credit lines, making larger payments necessary to pay those down.

The bottom line: the continuous increase inflation is putting the pinch on a pretty big cross-section of Americans, and an inability to rein it in could eventually prove disastrous for an economy that has already taken a beating from supply chain woes and workforce shortages.

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Featured Image Photo Credit: Getty Images