As the economy frays, companies close retail stores, and other layoff workers, Americans are going further into debt. In fact, the United States household debt has now reached all-time record highs.
According to the Federal Reserve’s Quarterly Report on Household Debt and Credit, household debt increased for the 19th consecutive quarter to $13.67 trillion. This increase in debt was “boosted by increases in mortgage, auto, and student loan balances,” the report explained.
U.S. household debt has hit yet another all-time high, with about $97 trillion in housing debt and about $4 trillion in non-housing debt.
This news comes as the auto industry is showing major signs of economic distress. Auto loan delinquencies, which millennials, in particular, have been struggling with, also rose slightly. Ford has announced layoffs and unsold cars are sitting in the parking lots of what used to be vibrant and bustling retail establishments. But don’t worry, because the media still says that the economy is doing just fine.
Increases in delinquencies very often foreshadow an economic recession. It’s a big deal when people can no longer pay their bills. According to Yahoo, Fitch Ratings Senior Director, Non-Bank Financial Institutions Michael Taiano told Yahoo Finance that these delinquencies might not be signaling a recession. “What we are seeing reflects the seasoning of a resumption of consumer debt growth over the past few years after a period of stagnation following the financial crisis.” Taiano added: “we anticipated some worsening in credit performance this year relative to last year when there were a number of macroeconomic tailwinds including the tax cuts. So it’s not that surprising to see some credit deterioration this year.”
Credit cards saw the most concerning rise. As unsecured debt, credit cards can present problems for so many users who cannot control their spending. They are the “most popular and common form of credit used by consumers,” according to the NY Fed, and saw a worrying increase in the number of serious delinquencies.
The 18 to 29 demographic in particular (Gen Z and late millennials) have been finding it more difficult to repay their credit card debt. “Credit card delinquency rates have been trending upward in the past few years — likely reflecting, in part, the increased presence of younger borrowers in the credit card market,” the report explained.
That demographic is also burdened with massive amounts of student loan debt, most of which is paid back to the government. The government will get their money (the taxpayers’ money) back with interest.
We will continue to encourage readers to save some extra money in an emergency fund and pay down the debts you already have while not taking on additional debt at this time. Prepare for the worst, and hope for the best.
I have ZERO debt, I am NOT a DEBT slave, I am NOT responsible for the debts of others, AND MORE THAN ANYTHING ELSE I AM NOT RESPONSIBLE FOR STUDENT LOAN DEBT. Let the students pay their own debt. NO debt “forgiveness”.
Forty percent of all life on earth are parasites. The other sixty percent is made up largely of sheep.
You mean the Too Big To Fail parasites that got a bail out not so long ago?
Don’t get excited. When this happened in 2008, the credit card company(Washington Mutual/now Chase Bank) offered a 66% discount to pay our balance in 3 months.
That was a great deal for us–we had racked up credit charges with outfitting our new house(saving the cash for later if needed for unexpected expenses)!! We won with that deal!!
We later learned the cc company needed cash real bad.
Yeah, if you can figure out how to use credit to your advantage, instead of merely as a way to spend money and go into debt stupidly, you can use it as a tool and do well. Takes discipline and patience mostly, plus a little knowledge of what’s happening economically.
rub,
Very good description of what we used to call adults.
Hopefully my generation( I’m a boomer) isn’t the last
of them.
Yes personal responsibility is needed. Folks that game credit cards are robbing the system and brag about it wow shameless.
Yrs ago my gramps told me buy nothing till you have to pull cash to pay for it and you will be debt free. Well I did now retired in modest home on gulf with several rental income sources. American pride from hard work.
Yes personal responsibility is needed. Folks that game credit cards are robbing the system and brag about it wow shameless.
Yrs ago my gramps told me buy nothing till you have to pull cash to pay for it and you will be debt free. Well I did now retired in modest home on gulf with several rental income sources. American pride from hard work.
The system is set up to steal your money, then make you out to be the deadbeat.
In 1913 the ship sunk.
Ever since, those that didn’t drown on the spot have been flailing around, trying to find safe harbor.
Avoid the sharks. They are not your friends. They just want to devour your liver.
The creditor is slave to the lender.
Do you choose Liberty? Then choose to refuse.
.
“I owe, I owe, it’s off to work I go!”.
After 8 years of diligence, I’m 9 months from being debt free. Being retired now, I have no intention of returning to debt slavery!
It is. Your generation pretty much ensured that.
Have fun trying to get your social security from overgrown children.
More bull crap articles and comments from the SHTF Plan mental patients. CRAZY!
For those that don’t care for the latest written offerings on this site, I suggest sending in an article for Mac to publish. Or if writing ins’t your forte, send in a few suggestions about what would be of interest. So many of us have vast quantities of information and insight, it would be quite interesting to share.
Yahooie, nice idea. I tried it and it doesn’t work. This site owner doesn’t care and doesn’t answer emails, will not accept submissions (articles) and there’s your answer.
Second that. Suggestions / Submitting is useless.
Getting to be old hat on this site, plus hate the new layout. Too much crap. Not enough of what people want. Seems like KISS is out these days.
Ketchup, that’s really too bad. I was hoping to see articles from regulars like yourself such as your info on how it was after the hurricane. That is on-the-ground useful information.
Maybe Mac just does not have the time to edit and prepare submitted articles. There likely are good editors that post who could help for a small compensation.