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Trump Official Touts High Credit Card Spending. Is That Good for Consumers?

By U.S. News & World Report

Credit card spending in the United States is “through the roof,” according to White House National Economic Council Director Kevin Hassett’s recent interview with Fox Business. Hassett also predicted a “very, very strong” job market, while studies show household debt at an all-time high as consumers use credit cards to cover everyday living expenses.

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Household Debt at an All-Time High

“Rising credit card usage does not signal financial strength. For many, it’s a coping mechanism to make ends meet,” says Austin Kilgore, analyst for the Achieve Center for Consumer Insights. “Increasingly, we’re seeing Americans rely on revolving debt not for discretionary spending, but to manage the rising cost of everyday necessities.”

According to survey data from the Achieve Center for Consumer Insights, nearly 1 in 5 Americans, or 19%, report carrying credit card debt tied to essential living expenses for more than a year.

Household debts remained on the rise in the fourth quarter of 2025, reaching a 20-year high, according to the Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York. Consumers owe $1.28 trillion on their credit cards, up 5.5% from the previous year, after credit card balances increased by $44 billion during the fourth quarter of 2025.

“The labor market may still appear relatively resilient, but household finances are telling a more nuanced story,” Kilgore says. “Consumers can be employed and still financially stretched. When people increasingly depend on credit to afford essentials, it suggests affordability pressures remain deeply entrenched.”

Delinquency rates also continued to rise, while serious delinquencies went from 1.7% to 3.26% year over year, particularly among “young, low-income consumers” as they struggled amid the economy. This was prior to current economic stresses, some due to the war with Iran, including import tariffs and soaring gas prices.

[Read: Best Grocery Credit Cards.]

The Cost of Credit Card Spending

With higher use of your credit card, it’s easy to use up more of your available credit than you should, leading to debt. This not only negatively affects your credit score, but also how lenders perceive you.

Credit utilization refers to the ratio of the amount of debt you have divided by your total credit limit and is responsible for a good amount of your credit score. Typically, you want to aim to not use more than 30% of your total available credit. Data has shown that people who have high credit utilization levels have a higher probability of defaulting on payments.

When you have a low amount of debt, you are also likely to receive low, fixed interest rates. This puts you in a better position to repay the debt faster, which can reduce your interest cost.

“Credit card spending can look strong on the surface, but the underlying question is what consumers are actually putting on those cards,” Kilgore says. “For many households, higher balances are less a sign of economic optimism and more a sign that wages and savings are struggling to keep pace with essential expenses like groceries, utilities and housing.”

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Trump Official Touts High Credit Card Spending. Is That Good for Consumers? originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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