«Permanent Distortion» author Nomi Prins argues Fed policy is adversely affecting everyone on «Making Money.»
Americans are increasingly turning to their credit cards to cover everyday expenses, with debt hitting a new record high at the end of September, according to a New York Federal Reserve report published Tuesday.
In the three-month period from July to September, total credit card debt surged to $1.08 trillion, an increase of $48 billion, or 4.6% from the previous quarter. It marks the highest level on record in Fed data dating back to 2003 and the eighth consecutive annual increase.
There was also an uptick in borrowers who are struggling with credit card, student and auto loan payments. As of September, about 3% of outstanding debt was in some stage of delinquency, up from the 2.7% recorded the previous quarter.
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Credit card delinquencies continue to rise from their pandemic-era lows and have actually surpassed the typical pre-pandemic level.
A sticker for Mastercard, Visa and Discover credit cards displayed on a street cart in New York, US, on Tuesday, Oct. 17, 2023. (Photographer: Angus Mordant/Bloomberg via Getty Images / Getty Images)
There are likely several reasons to blame for the rise in delinquencies. New York Fed researchers told reporters during a call Tuesday morning that the increase could reflect a loosening of tightening standards over the past few years, as well as an overextension by lenders and borrowers.
«It could be that there is some stress building, that people are losing jobs, income, there could be real financial stress building up, maybe because of high inflation,» the researchers said. «It could be a
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