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

Ying Lei Toh

Economic Bulletin, 2026, 3

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.

Date: 2026
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