KANSAS CITY, Mo. — Economists say more Americans are using credit cards to pay living expenses, a warning sign that our economy may be in danger.
More tenants are digging deeper into debt to remain in their homes. According to the Federal Reserve Bank of Philadelphia, there’s been a 70% increase in people putting rent payments on their credit cards this year. Housing experts say that’s an indicator that evictions may soon surge higher again.
Credit card companies have been waiving late fees, but high interest rates remain. An eviction moratorium in some states is protecting people until the end of the year, but that expires soon.
“Not surprisingly people will resort to what they have done in the past,” said Brent Schondelmeyer, deputy director of the Local Investment Commission (LINC), a non-profit organization that works to improve the lives of children and families in the Kansas City region.
“They will put more debt on credit cards, fully understanding that they won’t be able to pay it off,” Schondelmeyer said. “But it buys them time. In some senses, time is important. Time will bring us a vaccine, but time will not inoculate families from the consequences of burdensome debt.”
A Jackson County eviction moratorium ended in May. Still, the Eviction Lab says there have been more than 2,400 eviction filings in Kansas City since March 15. Many happened during three days in September.
That’s when the Centers for Disease Control and Prevention announced a moratorium to prohibit evictions, but before it actually took effect.
Many tenants remain unaware of the federal order and landlords know how to work their way around it, because the restrictions are not an outright ban.
Economists say an estimated 10 million Americans owe back rent. And without another relief bill from Congress, some expect to see a wave of mass evictions next year.
There’s a push to provide aid for landlords as well, as many may have a difficult time finding renters who can pay.
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Source: Fox 8 News Channel