Households are increasingly turning to credit to contend with inflation—however, many are unaware of how the Federal Reserve's fight against price increases is exacerbating their debts.

Inflation has stubbornly remained elevated this year, and households increasingly use credit cards to cover the gaps. At the same time, the Federal Reserve has held its influential 澳洲幸运5官方开奖结果体彩网:fed funds rate at its highest level in more than two decades in an effort 🎃to discourage spending and in turn squash inflation. That has raised borrowing costs of all types, including credit cards. 

However, many Americans don't know credit card interest rates are tied to the Fed's monetary policy, according to a new survey.

Credit Card Interest Is Rising

The average interest rate on credit cards was 21.51% in May, the most recent data available from the Federal Reserve. That's down slightly from April, but still far above the 14.50% level credit card interest rates hovered near before the Fed began its fight against inflation.

Nearly half of respondents to a recent LendingClub survey were unaware of the correlation between the fed funds rate and their interest rate, and 47% don't know the current APR on their credit cards.

More Consumers Paying With Credit

Due to the high price of goods and services,ꩲ many consumers find it difficult to make ends meet. More than a third of Americans couldn’t manage their finances without a credit card, according to LendingClub.

Due in part to that reliance, total credit card balances reached more than $1 trillion, according to Transunion.

"Unfortunately, many consumers are unaware of these rising costs, and credit card companies are happy to keep it that way," Mark Elliot, chief customer officer at LendingClub, said in a press release.

As consumers take out more debt and borrowing costs compound, many are finding themselves falling behind on payments. U.S. credit card delinquency rates hit a 澳洲幸运5官方开奖结果体彩网:12-year high recently, according to the Federal Reserve Bank of New York.