Important Takeaways:
- One month ago, when multiple discount retailers were lamenting the sudden collapse in US consumer purchasing power, we observed the reason this unexpected hit to US consumption: as the US personal savings rate had collapsed, the growth in consumer credit was slowing, and in July, credit card debt growth posted its first decline since the covid crash, just in time for another month of record high credit card rates.
- But fast forwarding just one month later, when in a stunning reversal, July consumer credit growth unexpectedly reversed the dramatic June slowdown, and soared more than $25 billion, to a new record high of $5.093 trillion.
- Sure enough, the sudden surge in credit card debt was a big surprise because according to the Fed, the average rate on interest-bearing credit card accounts just hit a new record high of 22.76%, which is a vivid reminder that while banks are happy to hike credit card rates, they rarely if ever cut them.
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Important Takeaways:
- Most Americans cannot afford a $1K emergency expense
- A majority of Americans say a $1,000 emergency expense would be too great of a hit to their savings and that they could not afford it, according to new data released Wednesday.
- Bankrate’s latest survey results found 56% of U.S. adults lack the emergency funds to handle a $1,000 unexpected expense and one-third (35%) said they would have to borrow the money somehow to pay for it.
- Of those, 21% said they would likely put such an expense on a credit card, while 10% said they would borrow the funds from a family member or friend, and 4% said they would take out a personal loan. Sixteen percent said they would reduce their spending in other areas to cover the bill.
- “All too many Americans are playing with fire when it comes to their personal finances in the sense that they don’t have more in emergency savings,” said Bankrate senior economic analyst Mark Hamrich. “Inflation has been a key culprit standing in the way of further progress on the savings front.”
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Important Takeaways:
- 56 million Americans have been in credit card debt for at least a year. ‘We are seeing pockets of trouble,’ expert says
- Americans are increasingly leaning on their credit cards.
- Altogether, card balances now total $1.08 trillion, according to the latest quarterly report from the Federal Reserve Bank of New York, a new record.
- “Over the past two years, Americans’ credit card balances have skyrocketed 40%,” said Ted Rossman, senior industry analyst at Bankrate.
- Nearly half, or 49%, of credit card holders carry debt from month to month on at least one card, up from 46% last year, the report found, and 56 million cardholders have been in debt for at least a year.
- The average credit card rate is now more than 20%, on average — an all-time high
- At 20.74%, if you made minimum payments toward the average credit card balance — which is $6,088, according to Transunion — it would take you more than 17 years to pay off the debt and cost you more than $9,072 in interest, Bankrate calculated.
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Important Takeaways:
- Average American household now has $10,170 credit card debt – here are the states where balances are highest
- American households now have an average of $10,170 credit card debt, as record numbers say they are worried about being cut off from access to loans.
- Data from the New York Federal Reserve shows nationwide credit card debt swelled by $43 billion in the second quarter of the year – the second largest increase on record.
- Meanwhile a separate survey by the Fed revealed 60 percent of respondents found it more difficult to access credit – the highest level since the data series began in June 2013.
- But some states are faring much worse than others as households in Hawaii have the highest debt currently, according to fresh analysis by WalletHub. Families in the Aloha state have $10,637 in credit card loans on average.
- It was followed by Alaska, California and New Jersey where average debts were $10,142, $9,796 and $9,468 respectively.
- By contrast, Wisconsin has the lowest debts of any state, with the average household owing $6,208 on their cards.
- The interest charged by credit card companies is loosely guided by the Federal Reserve’s benchmark rate which last month soared to a 22-year high.
- It has fueled calls to curb interest on such loans. Yesterday Missouri Republican Sen. Josh Hawley urged the Government to install an 18 percent cap on credit card rates as he hit out at providers.
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Important Takeaways:
- Credit card balances jumped in the second quarter and are above $1 trillion for the first time
- Total credit card indebtedness increased by $45 billion in the April-through-June period, a rise of more than 4% and just above $1 trillion.
- The Fed’s measure of credit card debt 30 or more days late rose to 7.2% in the second quarter, the highest rate since the first quarter of 2012.
- “Credit card delinquencies continue an upward trend, a growing sign that consumers are feeling the pinch of high prices and lower savings balances than they had just a few years ago.”
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- Household debt hit record $16.9 trillion last quarter, as consumers loaded up their credit cards
- Total US household debt hit a record $16.9 trillion during the fourth quarter, an increase of $394 billion, or 2.4%, from the prior three-month period, according to the Fed’s latest Quarterly Report on Household Debt and Credit. While the lion’s share of the debt is attributable to mortgages, the report showed that not only are credit card balances swelling at record levels, delinquencies are on the rise as well.
- Credit card balances increased nearly 6.6% to $986 billion during the quarter, the highest quarterly growth on record, according to New York Fed data
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A major credit card company has changed their rules with cardholders that allow them access that not even the government can have without obtaining a warrant from a judge.
Capital One issued an update saying “we may contact you in any manner we choose” and specifies that in addition to calls, emails, texts or faxes the company can pay you a “personal visit.”
The visits are specified to be both at the cardholder’s home or their place of employment.
Government organizations such as the Internal Revenue Service are prohibited from visiting your home without an arrest warrant.
Lawyers specializing in illegal-search cases say the Constitution only applies to law enforcement so it’s unlikely that anyone will be able to stop Capital One on grounds it violates a citizen’s Fourth Amendment rights.
The company’s agreement also states they are allowed to use fake Caller ID information in attempts to reach consumers. That means they can create bogus charitable organizations such as Disabled Children Fund and use that to identify themselves on home and cell phones.
Capital One officials say that despite the ominous language in the agreement, they will not be visiting the homes of customers unless the items are large ticket items like snowmobiles or Jet Skis.
A spokesman for Capital One said they are reviewing the language.
