Expert urges caution with debt
What happened
Amid rising interest rates, experts recommend consumers stabilize employment, delay discretionary purchases, and avoid taking on credit card debt.
Why it matters
Experts are advising consumers to be cautious with debt as household debt reached a record high of $18.8 trillion in the fourth quarter of 2025. Credit card debt specifically hit $1.28 trillion. Rising interest rates can quickly increase the amount owed on variable-rate debts like credit cards and home equity lines of credit. Credit card lenders typically base interest rates on the prime rate, which moves in tandem with the Federal Reserve's fund rate. The average APR for credit cards is around 22.30%, but some companies are charging as high as 28%. Even with potential rate cuts by the Federal Reserve, the impact on existing credit card debt may be minimal due to already high rates.
Key numbers
- Experts are advising consumers to be cautious with debt as household debt reached a record high of $18.8 trillion in the fourth quarter of 2025.
- Credit card debt specifically hit $1.28 trillion.
- The average APR for credit cards is around 22.30%, but some companies are charging as high as 28%.
What happens next
- Even with potential rate cuts by the Federal Reserve, the impact on existing credit card debt may be minimal due to already high rates.
Sources
Quick answers
What happened in Expert urges caution with debt?
Amid rising interest rates, experts recommend consumers stabilize employment, delay discretionary purchases, and avoid taking on credit card debt.
Why does Expert urges caution with debt matter?
Experts are advising consumers to be cautious with debt as household debt reached a record high of $18.8 trillion in the fourth quarter of 2025. Credit card debt specifically hit $1.28 trillion. Rising interest rates can quickly increase the amount owed on variable-rate debts like credit cards and home equity lines of credit. Credit card lenders typically base interest rates on the prime rate, which moves in tandem with the Federal Reserve's fund rate. The average APR for credit cards is around 22.30%, but some companies are charging as high as 28%. Even with potential rate cuts by the Federal Reserve, the impact on existing credit card debt may be minimal due to already high rates.
