Important Takeaways:
- The indebtedness of American households has surged in the last few years amid a challenging economic environment for consumers that has contributed to delinquency rates rising to their highest levels in more than a decade.
- A quarterly report published this month by the Federal Reserve Bank of New York on household credit and debt found that between the first quarter of 2021 and the second quarter of 2024, credit card debt surged 48.1% while household debt — which includes mortgages and auto loans — rose by 21.6%.
- In dollar terms, credit card debt rose from $770 billion in early 2021 to $1.14 trillion in the most recent quarter, while household debt increased from $14.64 trillion to $17.8 trillion in the same period.
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Important Takeaways:
- Mom, 28, forced to sell her dream car after forking out $40,000 in INTEREST alone over three years – as America’s auto debt spirals to $1.6 TRILLION
- Three years ago, 28-year-old Blaisey Arnold entered a local auto dealership and came away with the keys to an $84,000 Chevy Tahoe.
- Despite paying $1,400 a month in payments totaling more than $50,000, she still owes a balance of $74,000 to her lender – GM Financial.
- Not only did she not make a down payment, she said she traded in a previous car on which she had fallen into negative equity.
- Negative equity occurs when a driver owes more on their car loan than the vehicle is now worth. Sometimes, a dealer or lender can offer to roll the balance of an existing auto loan onto a new one, making it more expensive.
- ‘Honestly, it blows my mind that I have paid $50,000 into this car and only paid off $10,000,’ Arnold said.
- ‘The dealer pretty much told me they can get me out the door with the car within an hour. He didn’t act like it was something I should be concerned about,’ she said.
- Auto loans are becoming a major source of strain for car-obsessed Americans and leaving an increasing number with runaway debt.
- Last year, auto debt in the US reached a record-high $1.6 trillion, which comes out to an average of more than $13,000 per household.
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Important Takeaways:
- Americans are increasingly turning to their credit cards to cover everyday expenses, with debt hitting a new record high at the end of December, according to a New York Federal Reserve report published Tuesday.
- In the three-month period from October to December, total credit card debt surged to $1.13 trillion, an increase of $50 billion, or 4.6% from the previous quarter, according to the report. It marks the highest level on record in Fed data dating back to 2003 and the ninth consecutive annual increase.
- There was also an uptick in borrowers who are struggling with credit card, student and auto loan payments
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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 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- Horowitz: Inflation trap: Debt increases over a trillion in five weeks, quickest pace ever
- It looks like the Biden-McCarthy “Fiscal Responsibility Act of 2023” will rival the Inflation Reduction Act (Green New Deal) in its Orwellian meaning and outcome. Just five weeks after the deal was hatched, the Treasury has issued over $1 trillion in new debt!
- This is simply astounding. It took from our founding until 1980 to accrue the amount of debt that we have now added in just over five weeks. It is truly hard to overstate the magnitude and impact of this spending. Unlike in recent years, when we were servicing this debt at 1%-2% interest rates, this new debt will be serviced with an over 5% interest rate! Our debt has increased almost 50% in just four years, topping out near $32.5 trillion, but now it will have a compounding effect with higher interest rates to service it. So this notion that inflation will decrease in the long run is absurd. This debt is not just a number on the government balance sheet. It represents why middle-income Americans will not be able to afford the American dream for the foreseeable future. So no, the debt ceiling deal did not “avoid default,” it accelerated it.
- Personal credit card debt is now approaching $1 trillion, up 15% since pre-COVID and more than triple what it was before the Great Recession in 2008.
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Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- Inflation, economic instability and a lack of savings have an increasing number of Americans feeling financially stressed.
- Some 70% of Americans admit to being stressed about their personal finances these days and a majority — 52% — of U.S. adults said their financial stress has increased since before the Covid-19 pandemic began in March 2020, according to a new CNBC Your Money Financial Confidence Survey conducted in partnership with Momentive.
- “People are worried that the money they’ve saved won’t last and are worried they’re going to have to lean more on their credit cards and other sources of debt just to get by,” said Bruce McClary, a senior vice president at the National Foundation for Credit Counseling.
- Bank failures weaken confidence
- About a third of people earning six figures said they are living paycheck to paycheck and more than a quarter said they have no emergency fund.
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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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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- The US consumer is starting to freak out
- The flush savings accounts and cheap credit that helped keep Americans spending at high rates since 2020 are disappearing
- Retail purchases have fallen in three of the past four months. Spending on services, including rent, haircuts and the bulk of bills, was flat in December, after adjusting for inflation, the worst monthly reading in nearly a year.
- Sales of existing homes in the U.S. fell last year to their lowest level since 2014 as mortgage rates rose. The auto industry posted its worst sales year in more than a decade.
- One factor making forecasting more difficult: While unemployment is trending at a half-century low, big companies including Amazon.com Inc., Goldman Sachs Group Inc., and Microsoft Corp. have begun to cut jobs.
- Also weighing on many consumers: The rapid increase in rates in the past year, tied to Fed tightening, has pushed the cost of all types of debt higher.
- Mortgage rates reached a 20-year high last fall. Some 57% of consumers were concerned about making housing payments in the fourth quarter
- Additionally, tens of millions of Americans are set to start or resume making payments on student loans later this year, after the Supreme Court rules on President Biden’s student-debt cancellation plan. Payments have been frozen since March 2020, and are scheduled to begin again 60 days after litigation is resolved or the program is implemented.
- Many taxpayers will get smaller refunds when they file their returns in the coming months because Congress didn’t extend the breaks put in place at the height of the pandemic.
- S. factories, shippers and importers are pulling back, a sign they anticipate less demand from Americans in the months ahead.
- Inbound volumes at the ports of Los Angeles and Long Beach in California were down 20.1% in December from a year earlier, and have been behind 2019 levels since August.
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