{"id":1631561,"date":"2022-09-03T06:22:11","date_gmt":"2022-09-03T10:22:11","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1631561"},"modified":"2022-09-03T06:22:16","modified_gmt":"2022-09-03T10:22:16","slug":"average-credit-card-debt-soars-by-13-percent-largest-increase-since-1999","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/average-credit-card-debt-soars-by-13-percent-largest-increase-since-1999\/","title":{"rendered":"Average Credit Card Debt Soars by 13 Percent, Largest Increase Since 1999"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Faverage-credit-card-debt-soars-by-13-percent-largest-increase-since-1999%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1631561&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The average <a href=\"https:\/\/www.theepochtimes.com\/t-credit-card\">credit card<\/a> debt held by households in the United States surged by 13 percent in the second quarter, the largest increase in such debt since 1999, <a href=\"https:\/\/www.newyorkfed.org\/newsevents\/news\/research\/2022\/20220802\">according<\/a> to an Aug. 30 report from the Federal Reserve Bank of New York.<\/p>\n<p>More consumers are increasingly relying on credit amid\u00a0sky-high inflation in order to pay their bills.<\/p>\n<p>Credit card balances increased by $46 billion from last year, becoming the\u00a0second-biggest source of overall debt last quarter, though it is below pre-pandemic levels.<\/p>\n<p>Meanwhile, the current credit card <a href=\"https:\/\/www.theepochtimes.com\/t-interest-rate\">interest rate<\/a> is now at a record high of 17.96 percent,\u00a0<a href=\"https:\/\/www.bankrate.com\/finance\/credit-cards\/current-interest-rates\/\">according to Bankrate<\/a>, a financial advice website.<\/p>\n<h3>American Households Are Falling into Debt<\/h3>\n<p>Total American household debt rose by $312 billion from the second quarter of 2021 for a\u00a0total of $16.15 trillion at the end of June 2022.<\/p>\n<p>This is a 2 percent rise from the year-ago quarter, largely due to a jump in mortgage rates, and car loan and credit card balances, caused by40-year high inflation, said Joelle Scally, a \u00a0New York Fed analyst, in a statement.<\/p>\n<p>The Federal Reserve is attempting to fight inflation by raising interest rates, causing fears that its aggressive moves may encourage a bad recession, as the economy recovers from the pandemic.<\/p>\n<p>\u201cThe second quarter of 2022 showed robust increases in mortgage, auto loan, and credit card balances, driven in part by rising prices,\u201d said Scally, who reviews microeconomic data at the central bank branch.<\/p>\n<p>Household debt balances are about $2 trillion higher than they were at the end of 2019, before the start of the pandemic, as the price of goods and services have skyrocketed.<\/p>\n<p>\u201c\u2018Bidenflation\u2019 is wreaking havoc on American families\u2019 finances. Credit card debt is rapidly rising,\u201d wrote Rep. Lloyd Smucker (R-Pa.) in a <a href=\"https:\/\/twitter.com\/RepSmucker\/status\/1563292705458831362\">tweet<\/a>.<\/p>\n<div class=\"inline image-ct\">\n<div class=\"caption\">\n<p>Mortgage balances, which have fueled much of the increase in debt, rose in the second quarter, climbing by $207 billion, to $11.39 trillion.<\/p>\n<p>A consequence of this is that there are 35,000 people facing new foreclosures on their credit reports, a jump of more than 45 percent from the previous quarter.<\/p>\n<p>This is still below the 100,000 foreclosures before the pandemic, due to a moratorium prohibiting the repossession of homes during the period.<\/p>\n<p>The hike in interest rates since March of this year had caused mortgage rates to rise, leading to a decline in growth in the housing sector.<\/p>\n<p>Auto loans rose by $33 billion, to $199 billion, while student loan balances remained relatively the same as last year.<\/p>\n<p>Student loan payments have been on hold\u00a0since the pandemic,\u00a0but were set to resume on Sept. 1.<\/p>\n<\/div>\n<\/div>\n<p>President Joe Biden has made student loan forgiveness one of his major issues for the fall midterm elections\u2014an act that has divided much of the country.<\/p>\n<p>In total, non-housing balances in the second quarter increased by $103 billion, or 2.4 percent over the first quarter, the largest quarterly increase in six years.<\/p>\n<h3>Delinquency Rates Are About to Get Worse<\/h3>\n<p class=\"article-body\">\u201cWhile household balance sheets overall appear to be in a strong position, we are seeing rising delinquencies among subprime and low-income borrowers with rates approaching pre-pandemic levels,\u201d said Scally.<\/p>\n<p>Researchers at the New York Fed, in a separate <a class=\"color-link\" title=\"https:\/\/libertystreeteconomics.newyorkfed.org\/2022\/08\/historically-low-delinquency-rates-coming-to-an-end\/\" href=\"https:\/\/libertystreeteconomics.newyorkfed.org\/2022\/08\/historically-low-delinquency-rates-coming-to-an-end\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">blog post <\/a>last month, warned that the historically low delinquency rates appear to be coming to an end.<\/p>\n<p>The 30-day delinquency rate rose, from 1.66 to 1.81 percent in the second quarter of 2022,\u00a0according to the\u00a0<a href=\"https:\/\/www.federalreserve.gov\/releases\/chargeoff\/delallsa.htm\">latest <\/a>delinquency data from the Federal Reserve.<\/p>\n<p>Delinquency rates among areas of the country with the lowest average income rose 2.5 percent from roughly 2 percent last year.<\/p>\n<p class=\"article-body\">\u201cWith the supportive policies of the pandemic mostly in the past, there are pockets of borrowers who are beginning to show some distress on their debt,\u201d the researchers said, noting that \u201cthe delinquency transition rates for\u00a0credit cards\u00a0and auto loans are creeping up, particularly in lower-income areas.\u201d<\/p>\n<div class=\"key-facts\">\n<div class=\"key-facts-element animate-line\">\n<p>The central bank researchers said that delinquencies are \u201crising modestly\u201d across all debt types and is worse among low-income borrowers.<\/p>\n<p>However, Scally believes that average household finances appear to be in a strong position at this time.<\/p>\n<\/div>\n<\/div>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-bryan-jung\"><\/a><\/p>\n<p>Follow<\/p>\n<\/div>\n<p>Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.\n<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The average credit card debt held by households in the United States surged by 13 percent in the second quarter, the largest increase in such debt since 1999, according to<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1631561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1631561","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1631561"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1631561\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1631561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1631561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1631561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}