Credit card debt is reaching alarming levels, particularly among Black households, as Americans struggle with rising costs and high-interest rates. With 46 percent of people carrying credit card debt from month-to-month—up from 39 percent just a year ago—the financial burden is becoming a credit crisis, according to Banking Exchange. The Federal Reserve’s interest rate hikes have only exacerbated the issue, pushing the average credit card APR to a staggering 20.4 percent, the highest since the mid-1980s.
Black households are disproportionately affected, with reports showing that nearly half of Black adults say their household debt has increased, compared to about 30 percent of white adults, according to TheGrio. Inflation, higher food prices, and stagnant wages have forced many to rely on credit cards for everyday expenses. A report from the Federal Reserve Bank of New York shows that collective consumer credit card debt now stands at a record $1.21 trillion, with the average individual balance hitting $6,580.
According to the blog, “Postcolonial Studies And Beyond,” In “The Autobiography of Malcolm X” Malcolm X said his father warned about credit. His mother had begun to purchase items on credit, something his father was against. According to the blog, Malcolm X wrote that his father indicated that for Blacks using credit was a path back to slavery.
Today, the pattern continues. Credit systems, designed with high-interest rates and predatory lending practices, disproportionately target Black communities. Studies have found that debt collection lawsuits are overwhelmingly concentrated in Black neighborhoods, further deepening financial inequities, according to TheGrio. The reliance on credit, often seen as a lifeline, can quickly become a trap, leading to long-term financial instability.
Despite these challenges, some relief is visible. Reports indicate that while debt levels remain high, the rate of increase has slowed, CNBC reported. Consumers are becoming more cautious with their credit usage, and delinquency rates for overdue payments have slightly declined. However, financial experts warn that many Americans are just one emergency away from financial disaster.
As Malcolm X warned decades ago, the cycle of debt is not just an individual burden—it is a societal issue that must be tackled collectively.
