Credit card delinquencies and car loan defaults have reached their highest point in 10 years, according to creditors, as homeowners also struggle to pay off mortgages.
The New York Post reported that credit agency Equifax noted credit card delinquencies have reached 3.8%, while car loan defaults are up to 3.6%.
According to the report, 70 million credit card accounts have opened since 2019, while credit card debt has surpassed $1 trillion for the first time ever.
“The increase in delinquencies and defaults is symptomatic of the tough decisions that these households are having to make right now — whether to pay their credit card bills, their rent, or buy groceries,” Mark Zandi, chief economist at Moody’s Analytics, told the Washington Post.
Glenn Beck recently reported that mortgage rates have skyrocketed past 7%, while the APR on credit cards also surpassed 20%, an effect of the Biden economic plan, colloquially known as "Bidenomics."
The Federal Reserve could cause credit card rates to increase even more after September 2023, in an attempt to lower inflation rates from 3.5% to 2%. Inflation rose for the first time in the calendar year in July 2023 (3.2%), up 0.2% from the month before.
“This has put 61% of U.S. consumers into a paycheck-to-paycheck. That’s two percentage points higher than it was in June,” Beck said.
Around 78% of Americans who earn less than $50,000 are also living paycheck-to-paycheck, a rate that has increased by 4% between July and September 2023.
And 65% of American consumers who earn between $50,000-$100,000 are also living paycheck-to-paycheck. Perhaps shockingly, that number is 44% for those who earn over $100,000.
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