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As I sit here writing this, I am lamenting the arrival of our next electric bill. It seems that the cost of everything – food, fuel, credit – keeps stubbornly high.
POTUS Trump’s election promise to lower the rate of inflation has not come to fruition. The inflation rate increased from 2.6% in October 2024 to 2.7% in December 2025. This is still higher than the 2% target the Federal Reserve would like to see for lowering the Fed Funds. Another proposal Trump has suggested is capping credit card rates at 10 %. This has gone over very well with liberal Democrats, but not so well with Speaker Mike Johnson and other Republicans in Congress. It has also landed with a very loud “Thud” with credit card issuers and banks.
Trump has proposed using tariff revenue to fund payments of $2,000 to “most” Americans. Exactly who will receive these payments and when is unknown at this time. Also unknown is how much of the $287 billion in tariff revenue that has been received as of December 2025 will be used to fund it. $31 billion has already been earmarked for soybean farmers whose market collapsed when China ceased buying our beans.
The Trump administration has made progress to lower the overall cost of living. The Big Beautiful Bill signed on July 4, 2025, implemented changes that have and will reduce American’s tax liability. The impact of which is just now being realized as tax returns for 2025 are being done. For many in times of financial stress lowering their tax liability will not be enough. Credit cards will help to make ends meet. According to Lending Tree, outstanding credit card balances stood at $1.233 Trillion at the end of the third quarter of 2025 (September). This was a 60% increase from the pandemic low of $700 Billion at the end of the first quarter 2021 (March). Marylander’s have the third highest average credit card balances at $9,630 not far behind Connecticut at number 1 and New Jersey at number 2.
As credit card balances grow, families are put in a position of being able to just be making the minimum monthly payment. Basically, meaning that if they continue making only the minimum, they will never pay it off. The easy answer is to lower your spending, which for many middle and lower income families is easier said than done.
Insurance, housing expenses, utilities, and food must be paid. These expenses have gone up and cannot be avoided. You need to eat and have a roof over your head. For many lower and middle income households this has become much easier said than done.
Credit cards have become the safety net for paying regular monthly bills. It is much easier to charge it now and figure out how to pay it off later. Perhaps some of Trump’s proposals do end up being implemented. But what if they do not? Average credit card interest rates are 22-24%. Contact the creditor and request that they lower your interest rate. Lending Tree found that 83% of those who asked had their rate lowered by an average of 6.7%.
If you have good credit, apply for a 0% credit card. If successful, transfer the balance of a high-rate card. The “Simplicity Card” from Citigroup offers 0% for 21 months. Divide the balance of the high-rate card by 21 months and make equal payments and in less than 2 years the balance is paid potentially saving thousands in interest.
Purchasing a new car can be a bit more challenging. Not only has the average balance of new car loans increased to $42,000, but interest rates are also higher than several years ago. To cushion the blow, lenders will stretch payments to as long as seven years. Car dealers have recently offered rates at low as 0% on certain vehicles to move inventory. But the cost of a new vehicle may mean that even at 0% the payment will be too difficult to budget for. If so, you may need to consider buying a used vehicle.
Now is the time to scrutinize your spending carefully and prepare for financial uncertainty in the near future. If you are getting a large tax refund, put some in savings and pay off credit card debt with the rest of it. Pay as much as you can on the cards with the lowest balances first. Pay at least the minimum on all other cards to maintain a good payment history. Every card you pay to a zero balance allows you to put what was being paid on those cards against the card with next highest balance. Paying down debt and building savings will help you sleep better.
