US credit card defaults soar to highest in 14 years
Jade Warshaw of Ramsey Solutions presents the latest economic data showing that consumer credit card debt is piling up amid rising spending.
Experts are sounding the alarm over a new report that shows credit card Loan defaults have soared this year, warning that the barrier is poised to break the record for Americans’ consumer debt.
Lenders wrote off more than $46 billion in bad credit cards in the first nine months of 2024, according to a report by the Financial Times, citing data analyzed by BankRegData, a 50% increase over the first three quarters of 2023 since 2010.
The woman has credit cards. (iStock / iStock)
“High-income households are doing well, but the bottom third of US consumers have been left out,” Moody’s Analytics chief Mark Zandi told the FT. “Their savings rate is zero right now.”
Showing the findings, The Kobeissi Letter in X stated:
It New York Federal Reserve It was reported last month that Americans’ credit card debt hit another record high in September, rising to $1.17 trillion in the third quarter and marking the highest level since the Fed’s 2003 data.
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The report found that total household debt also rose to $17.94 trillion, along with mortgage balances ($12.59 trillion), auto loans ($1.64 trillion) and student loan balances ($1.61 trillion). dollars).
Credit card loan defaults rose 50% in the first three quarters of 2024 compared to the same period last year, prompting warnings that a “credit card debt bubble is popping.”
In a report discussing the report after its release, researchers at the New York Fed called the increase in debt outstanding a persistent and “worrisome” increase. car loan and credit card delinquency, and how stress and high delinquency rates are concentrated among young borrowers.
“Over the last few years, we’ve seen a significant increase in delinquency, especially for credit cards as well as auto loans,” said one researcher to follow.”
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They pointed to the increase in payments made by consumers on credit cards and auto loans, which is partly attributed to: to inflation and also because of high interest rates.
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