itstargetnews
Ramsey Solutions personality Jade Warshaw breaks down the latest economic data showing that consumer credit card debt is piling up amid a surge in spending.
Experts sound the alarm in front of a new report that indicates credit card Loan defaults have soared this year, warning that the dam is on the verge of breaking the record for Americans’ consumer debt.
In the first nine months of 2024, lenders wrote off more than $46 billion in seriously delinquent credit card loans, according to a Financial Times report citing data analyzed by BankRegData. This represents a 50% increase over the first three quarters of 2023, and the highest since 2010.
A woman has credit cards. (iStock/iStock)
“High-income households are doing well, but the bottom third of US consumers are being taken advantage of,” Mark Zandi, head of Moody’s Analytics, told the FT. “His savings rate right now is zero.”
AMERICA AS A COUNTRY AND PEOPLE NEED TO GET HOLIDAY DEBT ‘UNDER CONTROL,’ SAYS JENNIFER SEY
Pointing to the findings, The Kobeissi Letter declared in X, “The credit card debt bubble is popping.”
The New York Federal Reserve reported last month that Americans’ credit card debt hit another record in September, rising to $1.17 trillion in the third quarter and marking the highest level recorded in Fed data since date back to 2003.
FINANCIAL EXPERT TAKES YOUR END OF YEAR MONEY TO AFFECT YOU, AVOID HOLIDAY CREDIT CARD HANGOVER
The report showed total household debt also rose to a new high of $17.94 trillion, along with mortgage balances ($12.59 trillion), auto loans ($1.64 trillion) and student loan balances ($1.61 trillion).
Credit card loan defaults soared 50% in the first three quarters of 2024 compared to the same period last year, prompting a warning that “the credit card debt bubble is popping “.
In a call to discuss the report after its release, New York Fed researchers discussed growth in debt balances overall, persistent and “troubling” growth in car loan and credit card delinquency, and how stress and high delinquency rates are concentrated among younger borrowers.
“We have seen remarkably high flows into delinquency, particularly for credit cards and auto loans over the past few years,” said one researcher. “That’s something we’ve been flagging as a cause for concern, something to keep an eye on.”
GET THE FOX BUSINESS ANYWHERE CLICK HERE
They pointed to the increase in payments made by consumers on credit cards and auto loans, which is attributed in part to to inflation and also because of higher interest rates.
