Inflation-squeezed Americans are defaulting on their credit cards and auto loans at levels not seen since the financial crisis – and the struggle to pay their bills is poised to get worse as interest rates rise and the moratorium on student loans expires.
Low- and middle-income earners have been especially hit hard by soaring prices on everything from rent, groceries, and new and used cars despite the Federal Reserve’s attempts to tamp down stubbornly-high inflation.
This year, credit card delinquencies have hit 3.8%, while 3.6% have defaulted on their car loans, according to credit agency Equifax.
Both figures are the highest in more than 10 years.
“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.
Sorry, but everyone knows if their credit card interest rates are variable and can be raised by their card issuer. If you can’t risk a rise in interest rates then you shouldn’t borrow the money. People started confusing money they could borrow with money they have. That’s just stupid. It’s not hard to establish a budget based on what you earn (and whatever savings/investment cushion you’ve accumulated) and what you can therefore afford to spend. I only spent more than I had once, when purchasing a home, and that was with a fixed rate mortgage loan.
Biden-Flation you mean !!! ALL on BIDEN !!!!! Bankruptcies WILL SOAR !!!!!
Credit cards should be Outlawed !!!!!
Families need to squeeze Politicians !!!!!!
Cars need a Mortgage now days !!!! 30 year Fixed like a house !!!!
Ban credit cards & live within your means !!!! Word of Wisdom !!! Stay OFF their Hook !!!!!