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Financially Distressed Consumers May Have Turned to High-Cost Credit to Cope with Inflation

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  • Ying Lei Toh

Abstract

Many U.S. consumers, especially those who are financially distressed, have used various strategies to cope with rising prices last year. Notably, financially distressed consumers were substantially more likely to have taken on additional debt to manage the financial strain of inflation; furthermore, they often borrowed at higher costs. Higher inflation rates and cuts in federal financial aid this year may compel even more financially distressed consumers to rely on high-cost credit.

Suggested Citation

  • Ying Lei Toh, 2026. "Financially Distressed Consumers May Have Turned to High-Cost Credit to Cope with Inflation," Economic Bulletin, Federal Reserve Bank of Kansas City, pages 1-3, October.
    • Handle: RePEc:fip:fedkeb:103959
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    File URL: https://www.kansascityfed.org/research/economic-bulletin/financially-distressed-consumers-may-have-turned-to-high-cost-credit-to-cope-with-inflation/
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