I am one of those un-American people for I do not have any credit debt…..no cards……and an article I read tells the tale of the credit ‘crunch’…..
While the US economy is broadly healthy, pockets of Americans have run through their savings and run up their credit card balances after battling inflation for more than two years. Experts worry that members of these groups—mostly lower- and middle-income Americans, who tend to be renters—are falling behind on their debts and could face further deterioration of their financial health in the year ahead, particularly those who have recently resumed paying off student loans. Some key stats, per the AP:
- Americans held more than $1.05 trillion on their credit cards in the third quarter of 2023, a record, and a figure certain to grow once the fourth-quarter data is released by FDIC next month.
- A report from the credit rating company Moody’s showed that credit card delinquency rates and charge-off rates, or the percent of loans that a bank believes will never be repaid, are now well above their 2019 levels and are expected to keep climbing.
- These worrisome metrics coincide with the average interest rate on a bank credit card of roughly 21.5%, the highest it’s been since the Federal Reserve started tracking the data in 1994.
- “Overall, the consumer is credit healthy, said Silvio Tavares, president and CEO of VantageScore, one of the country’s two major credit scoring systems. However, the reality is that there are starting to be some significant signs of stress. Most analyses of Americans’ financial health tend to tell a tale of two consumers. On one side are the roughly two-thirds of Americans who own their homes and those who’ve invested in the stock market and done substantially well. But for the rest of America, those who have not benefited from the housing and stock markets, things are looking rough. “They’ve been hit very hard by inflation,” said Warren Kornfeld of Moody’s.
Read the full story.
(NO one will read the full story but it is there for those with an inquisitive mind)
I Read, I Write, You Know
“lego ergo scribo”
You mean you are one of those wise people. 😊
I try to be…..years ago I got in credit trouble and vowed to never use them again and sop far I am doing alright. chuq
I didn’t have to read the full story, as the situation over here is very similar, and widely reported. Interest rates on credit cards in the UK are generally higher than yours, currently at just below 24%. Some of the highest earners are in the worst debt, with credit cards maxxed out and mortgage payments that have almost doubled in just over a year. Most also have very large loans on new cars.
Best wishes, Pete.
35 years ago I decided to never use credit again….so far I am doing alright….Sue has a card for emergencies like her travels back and forth to Houston but I still have none in my wallet. chuq
We have a loan on the car we bought last year, but it is easily affordable, and if something bad happened, we could either sell the car or pay off the loan from savings. Otherwise, we have no mortgage and no debt.
I have no mortgage my house is paid for…..so no debt here as well. chuq
Me, too. Except now I live in the streets, 5 years and running. My third car was ‘confiscated’ 12 days ago by Westwood brand fake police. Then Priceline reserved a room in the wrong hotel 7 days ago, one not on the bus line, and won’t give back the $925.00, which was most of the remainder of this month’s social security check. The gov’t’s doing it all, you know. So now, not a pot to p… in, can’t even carry the clothes on my back, 3rd stolen car with all my property and all my replacement property. Had 4 hours sleep in 4 days, sleeping in 15 degree weather outdoors! Injured beyond walking, can’t even do inclines again. They took my teeth, too, Chuq…said “oh it’s Covid,who cares?”. Then they sold them along with 2 large storage units I paid for for 4 years (the original platinum bridge BEFORE the dentures from hell were ALSO in the units!)
They keep telling me to kill myself, but I’d rather execute them all at new NeuroBurg, something you probably mastered at 15 I bet. No seriously Abbey, what should I do? I can’t even pay off the false charges on the credit acct from 3 years ago, and no one will respond to me ever.
Do you REALLY think I am schizophrenic? Tell the truth.
I had to have credit cards for business travel. Unlike, it seems, many people, my balances are paid off by auto-debit the first closing day for each card. I never carry debt over to the next closing day or have more debt on the cards than I can afford to pay off in this way. This approach has worked well for me almost 40 years. The interest rates on these cards are outrageous, another reason not to carry debt over.
That is the best way to handle a card if at all possible. chuq
There are a lot of people out there who aren’t doing well. Even people who seem relatively affluent can end up in serious financial trouble these days. It doesn’t take much to push someone over the edge.
What I find scary is that almost half of younger people have no savings at all. No preparation for retirement, no emergency funds, nothing.
I read a report about that and it is worrying….all this debt will one day bite us all in the butt. chuq
I guess some folks should have paid some attention when they were in school…..
I agree chuq