If your debt is ballooning, there are steps you can take

Americans are increasingly struggling with credit card debt and other loans, and consumers are paying more for basic banking services such as ATM withdrawals, recent financial research finds.

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Interest and fees on credit card accounts carrying balances rose about 25 per cent in 2023 from the year before, according to a report published in August by the Financial Health Network, a non-profit focused on financial stability. And 42 per cent of households carrying balances on credit cards reported that their overall debt level was "unmanageable", up from 38 per cent in 2022, the network found.

"The uptick raises warning signs in our minds," said Ms Hannah Gdalman, the non-profit's manager of financial services solutions. More borrowers have been falling behind on credit card payments, especially those who have maxed out spending on their cards, according to the Federal Reserve Bank of New York. The average rate on cards charging interest is nearly 23 per cent, so balances can balloon quickly.

Making payments on credit cards as well as car loans, student loans and other instalment loans has been increasingly challenging for consumers, the financial network found. People whom the network considers "financially vulnerable" a classification of individuals who report that they struggle to pay bills on time, save for emergency expenses and manage debt - account for an outsize portion of the spending on interest and fees associated with credit products, the report found.