Tens of millions of Americans have depleted their savings and increased credit card balances after battling inflation during three years of Joe Biden’s administration.
“The U.S. economy is performing better than forecast a year ago, thanks in large part to a resilient consumer,” Shernette McLoud, an economist at TD Economics, wrote in a report. “But this spending is increasingly financed with Credit cards”he added.
The Americans They had more than US$1.05 billion on their credit cards in the third quarter of 2023, a record and a figure that will surely grow once the Federal Deposit Insurance Corporation (FDIC) release fourth quarter data in March.
A recent report from credit rating company Moody’s showed that non-performing loan rates and credit card charge-off rates — loans that a bank believes will never be repaid — are now well above their 2019 levels and they are expected to continue increasing.
“The reality is that consumers confirm significant signs of financial stress,” he said. Silvio Tavarespresident and CEO of VantageScore, one of the country’s two major credit rating systems.
On the one hand, the approximately two-thirds of Americans who own their homes and those who They have invested in the stock market and it has done well They still survive, but they consume their savings completely. For the rest of Americans, things look much more difficult.
Keys
- Interest. The average bank credit card interest rate, between 21.5% and 29%, is the highest since the FED began tracking the data in 1994.
- Rise. The average rent for a property with up to two bedrooms increased from US$1,424 at the end of 2020 to US$1,713 at the end of last year.
Source: Larepublica
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