I know the world is bleak right now, but don't worry, we're also taking on record levels of debt as well:
U.S. consumers collectively owe a record $1.14 trillion in credit card debt, figures released Tuesday by the Federal Reserve Bank of New York show. That's $27 billion more than the $1.13 trillion in credit card debt they carried during the second quarter of 2024.
$1.14 trillion.
One trillion, one hundred forty billion dollars.
I don't think I need to explain to y'all what often happens in cases like this.
First, debt goes up and up like a rocket ...
...and then, eventually, it explodes:
And it certainly looks like we might be on the verge of something like that:
The high tally comes amid concerns of an economic downturn triggered by modestly rising unemployment, and as soaring costs in food, housing and auto rates continue to drain household budgets. Americans have increasingly been relying on credit cards to make ends meet, with 6 in 10 adults, or 60%, using credit cards to buy groceries in 2023, according to a May report by the Urban Institute.
It also comes as levels of U.S. debt reach all-time, dizzying highs:
Delinquency rates on personal debt, meanwhile, are not trending well:
About 7.18% of cardholders fell into delinquency in the second quarter, up from 5% in the previous quarter, Fed statistics show.
There were encouraging signs after 2020, when Americans used some of the "stimulus" money to pay down debt. But in 2021, credit card balances "rocketed upward by 48%, fueled by a post-pandemic boom in services spending as well as high inflation and high interest rates."
Total consumer debt, meanwhile, stands at $17.8 trillion, which also appears to be a record:
Bad signs, folks. Let's hope we don't get four more years of this.
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