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A growing number of Americans are falling behind on their monthly credit card and car loan payments, a trend that may be a harbinger of economic troubles ahead, according to a new report from Moody's Analytics.
Findings published by Moody's indicate that household debt balances jumped to $17.29 trillion in the three-month period from July to September, up 1.3% from the previous quarter. That also marks an increase of $3.1 trillion since the last quarter of 2019, before the COVID-19 pandemic began.
«Consumers are left with a dilemma: they can curb their spending habits or plunge further into debt,» the report said. «The rate of non-residential consumer loan delinquencies will rise.»
FED'S FIGHT AGAINST INFLATION IS WEIGHING ON MIDDLE-CLASS AMERICANS
Credit card balances grew substantially in the third quarter, surging 4.7% from earlier in the summer to about $1.08 trillion. Auto loan balances also increased, climbing 0.8% to $1.6 trillion.
Shoppers in Atlanta, Georgia, on Tuesday, February 14, 2023. (Photographer: Dustin Chambers/Bloomberg via Getty Images / Getty Images)
The report also suggests that there has been an uptick in borrowers who are struggling with credit card and auto loan payments. Delinquency rates rose for most loan categories during the third quarter and are expected to continue climbing in coming months amid economic stress, tight lending standards and possible consumer overreach.
«The deterioration follows the end of significant government aid and debt forbearance,» the report said. «The rise in late payments among credit card and auto loan holders suggests some level of consumer
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