In a concerning economic trend, credit card delinquencies and car loan defaults have surged to a decade-high, with homeowners also grappling with mortgage payments.
As reported by the New York Post, credit agency Equifax has indicated that credit card delinquencies have escalated to 3.8%, while car loan defaults have risen to 3.6%.
The report further reveals that since 2019, 70 million new credit card accounts have been opened, and credit card debt has exceeded $1 trillion for the first time in history. Mark Zandi, Chief Economist at Moody's Analytics, told the Washington Post, "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."
In a recent report, Glenn Beck highlighted that mortgage rates have soared past 7%, and the APR on credit cards has also crossed the 20% mark, an outcome of the Biden economic plan, informally referred to as "Bidenomics." The Federal Reserve is expected to further raise credit card rates post-September 2023 to curb inflation rates from 3.5% to 2%. Inflation witnessed its first increase this calendar year in July 2023 (3.2%), a 0.2% rise from the previous month.
Beck stated, "This has put 61% of U.S. consumers into a paycheck-to-paycheck. Thats two percentage points higher than it was in June." The report also indicates that approximately 78% of Americans earning less than $50,000 and 65% of those earning between $50,000-$100,000 are living paycheck-to-paycheck. Alarmingly, this figure stands at 44% for those earning over $100,000.
On the CNBC show "Squawk Box," anchor Joe Kernen confronted Jared Bernstein, President Biden's top economic adviser, with these unsettling facts. Citing stories from the Wall Street Journal and New York Post about "Bidenomics," Kernen accused the Biden administration of dishonesty regarding the reduction of the national deficit. "It's going to be $2 trillion double last year and the cuts that he did make are based on cutting from the pandemic level," Kernen said. "So, it's kind of disingenuous."
Retailers are also feeling the pinch of these delinquency rates. Macy's, Kohl's, and Nordstrom have reported rising rates of customers defaulting on their in-store credit cards. Macys stated that delinquency rates were rising faster than planned."
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