It already has been well documented that the Internal Revenue Service entered this current tax season with twenty-four million unprocessed paper returns and correspondence.

What this means is that more than likely, there will be millions of delayed tax refunds this year—much to the dismay of many cash-strapped Americans who are still trying to navigate their way through the ongoing coronavirus pandemic and high inflationary pressures that have surged nearly 8 percent year-over-year.

Perfect Storm

“Thanks to a perfect storm of economic factors, those tax refund checks are going to be more important than ever for many people,” personal finance expert Sarah Hansen wrote on Money.com.

“Americans are contending with the highest rate of inflation in decades, and wages, while rising for many, aren’t making gains fast enough to keep up. So people are scaling back on many big purchases—especially, cars, which have seen prices skyrocket—and hoping that a big tax refund will help ease the pain,” she continued.

According to a new report from Capital One, it found that fast-rising inflation, Omicron, and the expiration of relief programs have only put even more financial strain on ordinary Americans. “In February 2022, roughly one-quarter of consumers (26%) were unable to pay at least one bill while 27% borrowed in some way to pay bills or make ends meet. Nearly half (47%) are concerned about paying at least one bill in the next month,” the analysis read. “As concerns over inflation increase, about six-in-ten Americans, report that rising prices have affected their spending, leading to cuts in discretionary purchases. The majority of respondents (62%) reported that inflation affected their spending recently, with lower and middle earners most affected,” it continued.

Reliance on Credit Cards

Adding to the financial struggles of Americans is the fact that many are becoming more reliant on credit cards and their high interest rates to make ends meet. According to a new survey conducted by the personal financial resource site GOBankingRates.com, it found that 30 percent of Americans have between $1,001 and $5,000 in credit card debt, 15 percent have $5,001 or more, and about 6 percent have more than $10,000. “Although 6% may seem like a small amount, that means that based on the survey results, 14 million Americans have over $10,000 of credit card debt,” the site wrote.

Furthermore, the poll discovered that 45 percent of Americans have taken on more credit card debt during the pandemic. “Individuals who carry a credit card balance from month to month are more than twice as likely to report having more debt now than before the pandemic,” the site claimed.

Per Fox Business, credit card expert Ted Rossman noted that by mid-2022, credit card debt could reach an all-time high. “Really, the only thing that is a bit surprising is how fast this is happening,” he said. “We’ve seen this movie before with respect to during and shortly after a recession, and credit card debt falls, then it climbs back up and sets new records.”

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters