Ramsey Solutions personality Jade Warshaw breaks down the latest economic data that shows consumers are racking up credit card debt amid a surge in spending.
Experts are sounding the alarm over a new report showing that credit card loan defaults have skyrocketed this year, warning that the dam of American consumer debt at a record high is bursting.
In the first nine months of 2024, lenders wrote off more than $46 billion in seriously delinquent credit card loans, according to a report in the Financial Times citing data analyzed by BankRegData. This is a 50% increase from the first three quarters of 2023 and the highest since 2010.
The woman has a credit card. (license/image)
Mark Zandi, head of Moody's Analytics, told the FT: “High-income households are doing well, but the bottom third of American consumers are being exploited.” “Their current savings rate is zero.”
America as a country and individuals need to get holiday debt 'under control', says Jennifer Say
The Kobessi Letter pointed to this finding and declared in X that “the credit card debt bubble is bursting.”
The New York Fed reported last month that Americans' credit card debt hit another record high in September, reaching $1.17 trillion in the third quarter, the highest level in Fed data since 2003. did.
Financial experts share their year-end money moves, unveil steps to avoid the holiday credit card hangover
According to the report, in addition to outstanding home loans ($12.59 trillion), auto loans ($1.64 trillion), and student loans ($1.61 trillion), total household debt also hit a record high of 17.94 trillion. reached a billion dollars.
Credit card loan defaults soared 50% in the first three quarters of 2024 compared to the same period last year, prompting warnings that “the credit card debt bubble is bursting.”
In a conference call to discuss the report after its release, New York Fed researchers discussed the overall increase in debt and the persistent and “concerning” increase in debt. car loan How credit card delinquency, stress and high delinquency rates are concentrated among young borrowers.
One researcher said, “During the past few years, there has been a marked increase in delinquencies, especially for credit cards and car loans.'' “This is something we have been pointing out as a reason for concern, and it is something to note.”
CLICK HERE TO GET FOX BUSINESS ON THE GO
They note that consumers are paying higher payments on credit cards and car loans, which is believed to be partially to blame. to inflation And also because interest rates are high.
