NEW YORK — Credit card debt has already reached a record high, and more people are carrying debt from month to month as the Federal Reserve raises interest rates once again.

Increased interest rates by the Fed are intended to combat inflation, but they have also resulted in higher annual percentage rates (APRs), which means those who have credit card debt pay more in interest. On Wednesday, the Fed declared that it would raise interest rates by another quarter point.

People are using their credit cards more frequently for everyday purchases because inflation is still high.

The Golden Corral in York, Pennsylvania's 46-year-old kitchen manager, Lance DeJesus, who attributes the increase in prices to the economy, inflation, gas prices, and food costs. "A year ago, if you had $100, you could go to the grocery store and buy a lot of bags." I now leave with just one bag.

DeJesus claimed that he carries a $2,600 credit card balance from month to month across a number of cards, with interest rates ranging from 16.99% to 21.99%.

When DeJesus lost his job early in the pandemic, he claimed that unemployment benefits, stimulus payments, and child tax credits—which were distributed to his household through his wife, who has three children—all assisted in keeping him afloat. He now uses credit for emergencies as the emergency relief and stimulus policies from the COVID era have ended.

He's not alone, either. According to Bankrate.com, a website that provides financial information online, 46% of people carry debt from month to month, up from 39% a year ago.

The average annual percentage rate (APR) for credit cards has reportedly risen to 20.4%, which is the highest level seen since Bankrate started keeping track in the middle of the 1980s.

According to a recent survey conducted by The Associated Press-NORC Center for Public Affairs Research, 35% of American adults say their household debt has increased since last year. About half of Black and Hispanic adults say their debt has increased, and 4 in 10 adults in households making less than $100,000 per year say their debt has gone up. More people are now falling behind on payments, according to data, which points to a so-called "K-shaped recovery" in which the gap between the wealthy and the poor is widening.

Credit card debt decreased 17% during the early pandemic as a result of stimulus initiatives, emergency aid, and a decline in consumer spending. However, credit card balances in the U.S. increased by $61 billion to $986 billion in the final three months of 2022, surpassing the pre-pandemic high of $927 billion. Younger people, those with lower incomes, and those with lower credit scores are to blame for this. Additionally, wages are not keeping up with inflation.

For those who can pay off the balance each month, using a credit card can offer financial protection, but the cost is high for those who can't. Although Gary Deuvall, 68, of Walls, Mississippi, who worked maintaining and repairing motorcycles, received assistance from stimulus checks, he still owes a significant amount on his credit cards. To combat high interest rates, he and his wife transferred that balance to a card with 0% interest. Offers with 0% interest are typically only valid for a short time, sometimes up to 21 months, and banks occasionally impose a flat fee.

Dan Stokes, a special education teacher from Richmond, Virginia, who is 31 years old, claims that delaying his student loan payments has enabled him to make ends meet. Nevertheless, he still owes about $8,000 on his credit cards. He transferred about $1,200 to a credit card with 0% interest for the following 12 months.

"Honestly, it feels really good that I don't have to make those student debt payments right now," he said of the emergency policy, which has been extended until the summer. Because of this, there are times when I have to swipe my credit cards just to get by. "My pay as a teacher hasn't kept up with inflation."

One of the fastest ways for consumers to be hit by higher interest rates is through credit card rates.

Most mortgages and auto loans have fixed rates. Therefore, if you're new to the market, it has a significant impact, but if you already have a loan, it won't have an impact on you, McBride explained. With credit cards, the higher interest rate is essentially passed along immediately.

Using a sample from the probability-based AmeriSpeak Panel, which is intended to be representative of the U.S. population, the poll of 1,081 adults was conducted from March 16 to 20. For all respondents, the margin of sampling error is +/- 4.0 percentage points.