Best economy ever, Jack!
Americans have raked up over a TRILLION dollars in credit card debt as they struggle to make ends meet on their normal paychecks.
This is, needless to say, a record high.
Americans now owe a collective $1.13 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
Credit card balances increased by $50 billion, or roughly 5%, in the fourth quarter of 2023, the New York Fed found. Credit card delinquency rates also jumped — particularly among younger millennials, or borrowers between the ages of 30 and 39, who are burdened by high levels of student loan debt.
$50 billion in a period of 3 months!
It's wild that millennials are pushing 40 - past their prime years for education and jumping the career ladder - but they are STILL scrambling just to survive.
Ironically, debt went down during the pandemic a trend throughout Trump's time in the White House, but as soon as everything opened back up, and then when Biden took over, credit card borrowing skyrocketed among Americans.
Growing by nearly $100 billion yearly.
And now, with student loan payments off pause, people are starting to miss their credit card payments on top of their heavier borrowing.
Somewhere, Dave Ramsey is having a conniption.
Here's how Fake News CNBC describes the problem:
'Even though the economy overall is doing great, there are pockets out there where people are overextended,' the New York Fed researchers said on a press call Tuesday.
Many consumers feel strained by higher prices — most notably for food, gas and housing — and more cardholders are carrying debt from month to month or falling behind on payments, according to a separate report from the Consumer Financial Protection Bureau.
The economy is doing GREAT! Everything just costs more and people can only afford less. So they're borrowing more than ever.
Best economy ever, Jack! Go buy some chocolate chocolate-chip ice cream!
To add to American's woes, credit card interest rates have jumped to over 20%.
Since most credit cards have a variable rate, there's a direct connection to the Fed's benchmark. As the federal funds rate rose, the prime rate did, as well, and credit card rates followed suit.
The average annual percentage rate is now more than 20% — also an all-time high.
Thanks, Fed!
(The government is really doing a bang-up job, aren't they?)
Oh, and it's only going to get worse.
It's a self-perpetuating problem.
'Even though $1 trillion in credit card debt is a staggering number to wrap your brain around, the unfortunate truth is that it is only going to keep climbing from here,' said Matt Schulz, chief credit analyst at LendingTree.
'Americans are still struggling with lingering inflation and rising interest rates," he added, "forcing them to lean on credit cards more and more.'
You know what that means, people.
It's time to cut the cards, sell some things, eat rice and beans, and get out of this monstrous debt.
Things aren't getting better, barring a major change in DC. So it's up to us.
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