The Nierzwickis are not alone in struggling to stay on top of debt. Among middle-class adults with credit card payments, more than a quarter say they’ve been “behind” at some point in the last year, according to exclusive data from the Harris Poll for Bloomberg News. New York Federal Reserve data shows credit-card balances turning delinquent — more than 30 days late — at an annual rate of 8.5% last quarter.

The high borrowing costs — and how households manage them — pose some risk to the broader economy.

“As rates rose in 2023, we avoided a slowdown due to spending that was very much tied to easy access to credit,” said Shannon Grein, an economist at Wells Fargo. “Now, credit has become harder to come by and more expensive,’’ she said, calling the change “a significant headwind to consumption.”

Mohsin Meghji, managing partner of M3 Partners, a firm that consults for troubled companies, is girding for the reverberations of that kind of pullback by consumers.

“Any tightening there immediately hits the top line of companies,” said Meghji. For those companies — heavily indebted themselves after years of easy borrowing — “there’s no easy fix,” he added.

Of course, consumers can try to refinance their debt after the Fed lowers rates. But the timeline and magnitude of cuts is uncertain, and refinancing fees can sometimes outweigh the benefit.

Student debt burden

The return of student loan payments is adding to many borrowers’ financial stress.

Brittany Walling, a 29-year-old in Columbus, Ohio, has about $80,000 in federal student loans and $20,000 in private debt from her undergraduate and graduate degrees. That’s alongside $6,000 in credit card debt, which she accumulated when she was unemployed for a six-month stretch in 2022.

She’s been living paycheck to paycheck, she said, on her $50,000-a-year salary working for the public health department.

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