Many American families struggle financially despite being above the poverty line. Known as "ALICE" families, they face high inflation, higher interest rates, and stagnant wages. They live paycheck to paycheck and have little savings to cushion unexpected expenses. This financial strain is exacerbated by the recent increase in credit card debt and delinquency rates. The situation is particularly concerning for low-income households who spend a large portion of their income on necessities that are experiencing higher-than-average inflation.
Despite debt worries, Americans plan to indulge in travel, dining, and entertainment in 2024. Young adults prioritize present enjoyment over future savings, influenced by the pandemic's "you only live once" mindset. This "revenge spending" or "doom spending" results in taking on more debt, with Gen Z and millennials most likely to splurge. However, experts warn that neglecting long-term financial security through saving may have future repercussions.
Visa and Mastercard have agreed to pay $30 billion to settle a lawsuit where merchants accused them of charging excessive fees. These fees, known as "swipe fees," are paid by merchants every time a customer uses a credit or debit card. The settlement will reduce these fees for merchants, which may lead to lower prices for consumers.
Interest rates for credit cards, savings accounts, and mortgages remain elevated despite the Federal Reserve holding off on rate cuts. Credit card rates could stay high for the rest of 2024, while savings accounts continue to offer competitive interest rates but may moderate slightly over time. Mortgage rates, on the other hand, could decline to around 6% by year-end, potentially easing the tight housing market.
The Federal Reserve is unlikely to lower interest rates this week, despite high inflation. While this means borrowing costs will stay high for mortgages, credit cards, and auto loans, it also means higher interest rates on savings accounts and certificates of deposit. Experts expect interest rate cuts in the coming months, but at a slower pace than the recent increases.
AT&T's recent major outage prompted the company to automatically credit $5 to affected customer accounts. However, consumers are advised to proactively contact their service providers for reimbursements, as there is no legal requirement for phone and internet providers to offer refunds. Experts recommend reaching out via customer service phone lines, online portals, or chatbots. By taking the initiative, customers can ensure they receive compensation for outage-related inconveniences.
