According to the credit rating agency TransUnion, the average American has about $6,300 in credit card debt. Now, a report shows that credit card defaults are rising as family budgets can’t keep up with expenses and the cost of living.
According to the Financial Times, during the first nine months of 2024, lenders were forced to write off $46 billion in delinquent credit card balances. Officials said that’s a 50% jump from 2023 and the highest rate since 2010.
Making matters worse, Moody’s Analytics reports that people who earn at the bottom third of the income ladder are tapped out and now have zero savings.
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The New York Federal Reserve released figures showing that credit card debt in September reached $1.17 trillion, the highest level in Fed data-keeping. Household debt, including mortgages, car loans and student loans reached close to $18 trillion, another record. Analysts say some of that is due to inflation and higher interest rates.
As January rolls in, so do the holiday spending bills. Lending Tree says more than one-third of Americans took on additional debt this holiday season, racking up an average of $1,181 in credit card spending.
