Americans have saddled themselves with credit card debt. Now renters and the poor are falling behind
Noticeable pockets of Americans _ renters, the poor and middle-income borrowers _ are running up their credit cards balances, and increasing numbers are falling behind on their debts
NEW YORK (AP) — While the U.S. economy is broadly healthy, pockets of Americans have run through their savings and run up their credit card balances after battling inflation for more than two years.
Experts worry that members of these groups -- mostly lower- and middle-income Americans, who tend to be renters -- are falling behind on their debts and could face further deterioration of their financial health in the year ahead, particularly those who have recently resumed paying off student loans.
“The U.S. economy is currently performing better than most forecasters expected a year ago, thanks in large part to a resilient consumer," wrote Shernette McLoud, an economist with TD Economics, in a report issued Wednesday. "However, more recently that spending is increasingly being financed by credit cards.”
Americans held more than $1.05 trillion on their credit cards in the third quarter of 2023, a record, and a figure certain to grow once the fourth-quarter data is released by Federal Deposit Insurance Corp. next month. A recent report from the credit rating company Moody’s showed that credit card delinquency rates and charge-off rates, or the percent of loans that a bank believes will never be repaid, are now well above their 2019 levels and are expected to keep climbing.
