Category Credit & Debt

In September 2025, many Americans are struggling financially due to rising prices, high interest rates, and little or no wage increase. Everyday necessities like food, housing, and electricity have become more expensive, leading families to use credit cards and loans just to get by. This has caused U.S. credit card debt to hit a record high of $1.21 trillion. Even though people were hoping the Federal Reserve would lower interest rates to make borrowing cheaper, inflation is still sticking around, making it harder for the economy to recover and for families to stay financially stable.

The Federal Reserve may soon lower interest rates for the first time in a year, as Chair Jerome Powell responds to ongoing inflation and mixed economic signals. If the Fed cuts rates, it could become cheaper for people to borrow money for things like home loans, car loans, and credit cards. This is good news for households carrying debt or planning big purchases. However, the effects won't be felt right away, and it won’t solve deeper issues like slow wage growth or the high cost of living. Lower rates can help, but they’re just one piece of the puzzle in a very complex economy.

The Federal Reserve is expected to cut interest rates in mid-September 2025 due to signs of a slower job market and inflation concerns tied to possible new tariffs. This move could lead to lower borrowing costs, which may benefit people looking to get new loans, refinance their mortgages, or invest in things like education or home ownership. People with strong credit scores could especially benefit from better loan terms. However, those with existing fixed-rate loans won’t see any changes in their payments. On the flip side, savers may earn less interest on high-yield savings accounts and CDs, since banks often lower the rates they pay when the Fed cuts rates.

In 2025, many Americans are turning to emotional spending as a way to cope with rising prices and financial stress. With inflation expected to stay high at around 4.8% each year and new tariffs—like a big 60% tax on goods from China—everyday items such as food and clothing are costing more than ever. A recent LendingTree survey found that 63% of people admit their emotions influence their shopping habits, and 38% say they shop to relieve stress. Unfortunately, this kind of “retail therapy” often leads to credit card debt, with over 43% of shoppers falling into this trap. In tough economic times, emotional spending can feel like quick relief—but the long-term financial impact can make things even harder.

As 2026 approaches, experts are warning people to think twice before taking out new loans or using more credit. This is because inflation—when the prices of things like food, gas, and rent go up—is still very high. At the same time, interest rates, which are the extra amounts you pay when borrowing money, are also high. That means it costs more than ever to use credit cards or take out loans. Financial advisors say borrowing under these conditions could lead to long-term stress and regret, since people may end up paying much more than they expected just to cover basic expenses. Instead of borrowing, it's smarter to focus on budgeting and finding ways to save until the economy stabilizes.

In 2025, financial experts are urging Americans to be careful with their money, especially those close to retirement. With inflation rising again and the Federal Reserve choosing not to lower interest rates further, the economy is uncertain and unpredictable. Experts warn that emotional reactions to market changes—like pulling money out of investments too quickly—can damage long-term financial goals. Instead, people should stick to their plans and stay calm. Managing debt is also more important than ever, as the average American owes over $7,000. Reducing debt and avoiding rash financial decisions are key to staying financially secure during these uncertain times.