A new report says that in the US, credit card debt grew over the first quarter of this year at the fastest pace in two decades.

A new report from independent investment research and online financial media company Hedgeye cites data from the US Federal Reserve to show that over the first quarter of the year, total credit card balances were more than 17% higher that one year prior, which was the biggest jump in at least two decades.

The Hedgeye report found that the costs of revolving credit, which does not have a fixed number of payments compared to installment loans, continued to rise to multi-decade records. According to Fed data, new credit cards now have an average interest rate of 20.82%, compared to just above 12% in 2013.

Fed data released in June showed that the amount of credit card debt held by Americans is at a record level of almost $988 billion.

Financial experts sat the debt continues to grow because households are being forced to use their credit cards to cover monthly expenses, as high inflation continues to reduce the buying power of their salaries.

In June of 2022, the consumer price index reached a 40-year high at 9.1% as food and energy prices surged. Since then inflation cooled, falling to 5-6% over the first quarter of the year, and then to 3% in June.

The drop in inflation finally began, following the Federal Reserve hiking interest rates ten times since the beginning of last year, which brought the federal funds rate to a range of 5.00-5.25%, up from 1.75% one year prior.

Experts are expecting another rate hike at the next Fed meeting this week, despite the fact inflation has already begun to retreat.