{"id":1850460,"date":"2023-02-17T07:20:50","date_gmt":"2023-02-17T12:20:50","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1850460"},"modified":"2023-02-17T07:25:51","modified_gmt":"2023-02-17T12:25:51","slug":"worrisome-trend-emerges-among-credit-card-holders","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/worrisome-trend-emerges-among-credit-card-holders\/","title":{"rendered":"Worrisome Trend Emerges Among Credit Card Holders"},"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\">14<\/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%2Fworrisome-trend-emerges-among-credit-card-holders%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=1850460&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-->\n<p>A new report released Thursday revealed that Americans have the highest credit card debt levels in decades. It is now nearing $1 trillion.<\/p>\n<p>A report by the\u00a0<a href=\"https:\/\/www.theepochtimes.com\/t-federal-reserve\">Federal Reserve<\/a> Bank of New York discovered that \u201ccredit card balances increased by $61 billion to reach $986 billion, surpassing the pre-pandemic high of $927 billion\u201d In the fourth quarter. At the same time,\u00a0delinquencies among borrowers accelerated in the same time period, according to the report.<\/p>\n<p>\u201cAlthough historically low unemployment has kept consumer\u2019s financial footing generally strong, stubbornly high prices and climbing interest rates may be testing some borrowers\u2019 ability to repay their debts,\u201d Wilbert van den Klaauw is an economic advisor at the New York Fed.<\/p>\n<p>Younger borrowers are more likely to struggle to repay auto and credit card debts.https:\/\/libertystreeteconomics.newyorkfed.org\/2023\/02\/younger-borrowers-are-struggling-with-credit-card-and-auto-loan-payments\/&#8221;>according<\/a> To a New York Fed post.<\/p>\n<p>The average credit card rate is near 20 percent\u2014at 19.91 percent\u2014according to a Bankrate <a href=\"https:\/\/www.bankrate.com\/finance\/credit-cards\/current-interest-rates\/\">Update<\/a> issued on Feb. 15. Credit card rates move in tandem with the the Federal Reserve\u2019s benchmark interest rate, which the central bank has been increasing to deal with high inflation.<\/p>\n<p>\u201cAmericans have been facing higher prices everywhere \u2026 including on purchases they may be putting on their credit cards\u2014at the grocery store, at the gas pump, and for many other types of goods,\u201d New York Fed researchers wrote in an article.<\/p>\n<p>\u201cIt is possible that increasing prices\u2014and correspondingly, debt service payments\u2014are cutting into borrowers\u2019 balance sheets and making it more difficult for them to make ends meet, particularly as real disposable income fell in 2022,\u201d The post has been added.<\/p>\n<h2>Other Debt<\/h2>\n<p>It comes as total household debt rose to\u00a0$16.90 trillion in the same time period, increasing $394 billion, or about 2.4 percent, according to the New York Fed\u2019s <a href=\"https:\/\/www.newyorkfed.org\/microeconomics\/hhdc\">Report<\/a>. At the same time, mortgage balances rose\u00a0to $11.92 trillion, car loan balances rose to\u00a0$1.55 trillion, and student loan balances increased to $1.60 trillion.<\/p>\n<p>\u201cThe share of current debt transitioning into delinquency increased for nearly all debt types,\u201d the report said, while the Fed\u2019s blog post said that the overall debt increase is the \u201clargest nominal quarterly increase in twenty years.\u201d<\/p>\n<p>Analysts believe that the increase in overall debt is due to the turbulent 2022, when the U.S. central banks raised its benchmark rate from nearly zero last March to over 4 percent by December last year. This was the fastest pace of tightening monetary policy since the 1980s. Rates have been increased in a bid to deal with inflation rates that haven\u2019t been seen in 40 years.<\/p>\n<p>According to the Fed&#8217;s statement, it has sought to reduce demand in order to heat the economy. The economy was badly out of balance in early 2013, with too much money chasing down too few properties and too many goods. There were also labor shortages in several sectors.<\/p>\n<figure id=\"attachment_4051064\" class=\"wp-caption alignnone\"><a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2021\/10\/15\/fed-bank-ny-1200x800.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"lazy size-medium wp-image-4051064\" src=\"https:\/\/www.theepochtimes.com\/assets\/themes\/eet\/images\/white.png\" data-src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2023\/02\/fed-bank-ny-600x400-1.jpg\" alt=\"fed-bank-ny\" width=\"600\" height=\"400\"   style=\"display:none\"><figcaption class=\"wp-caption-text\"><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-4051064\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2023\/02\/fed-bank-ny-600x400-1.jpg\" alt=\"fed-bank-ny\" width=\"600\" height=\"400\" \/><\/noscript><\/figcaption><\/a> On March 18, 2020, people walked in masks to the Federal Reserve Bank of New York. (Lucas Jackson\/Reuters)<\/figure>\n<p>The Fed has now raised its policy interest rate and is currently at 4.50 to 4.75 percent. Investors are expecting at least two more 25-basis point increases before the Fed stops to allow its actions through the economy to lessen the risk of it going into recession.<\/p>\n<h2>How to deal with credit card debt<\/h2>\n<p>American cardholders averaged $5,221 in balance in 2021.https:\/\/www.experian.com\/blogs\/ask-experian\/state-of-credit-cards\/&#8221;>according<\/a> Experian, a credit reporting agency, in a recent study.<\/p>\n<p>An article by Reuters a href=&#8221;https:\/\/www.reuters.com\/markets\/wealth\/us-interest-rates-soar-four-ways-manage-credit-cards-now-2022-08-22\/&#8221;>recommends<\/a> that for those in debt, they should call up their lender and see if they can get a lower rate\u2014something more likely to happen if debtors are longtime cardholders in good standing, and not someone who makes late payments or is bumping against credit limits.<\/p>\n<p>You can also arrange for a balance transfer to your new card to cut those high-interest rate rates. While one will have to repay the balance, there is still an option to enjoy a prolonged introductory period of zero percent interest.<\/p>\n<p>Be careful with balance transfers, as it can cause credit problems. According to Ed Mierzwinski (senior director, federal consumer program, advocacy organization U.S. PIRG), closing old accounts and opening new accounts is not a good way to improve your credit score.<\/p>\n<p>Many cardholders will simply pay the minimum amount when they receive their monthly statements. But they are playing right into lenders\u2019 hands\u2014leading to interest income that makes the banks about $100 billion a year, according to the Consumer Financial Protection Bureau.<\/p>\n<p>For example, a $10,000 loan on a card at a 20% rate will result in a small monthly payment for $200. This will add $11,000 to your interest over the life of the debt. It will take you 106 months to repay. Don&#8217;t carry any monthly balances, but go above the minimum.<\/p>\n<p>Mierzwinski added that cardholders should be careful with their points and rewards programs.<\/p>\n<p>\u201cIf you are getting a 1-to-2 percent reward, that\u2019s completely offset by cost of carrying a balance at an interest rate like 15-to-25 percent, or even higher,\u201d He said. \u201cPeople are being manipulated into using their cards more and more\u2014and the credit card companies are laughing all the way to the bank.\u201d<\/p>\n<p><em>This report was compiled by Reuters<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new report released Thursday revealed that Americans have the highest credit card debt levels in decades. It is now nearing $1 trillion. A report by the\u00a0Federal Reserve Bank of New York discovered that \u201ccredit card balances increased by $61 billion to reach $986 billion, surpassing the pre-pandemic high of $927 billion\u201d In the fourth &hellip;<\/p>\n","protected":false},"author":1,"featured_media":1850463,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[5137,6178,5998,18905,12264,18904],"class_list":["post-1850460","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-card","tag-credit","tag-emerges","tag-holders","tag-trend","tag-worrisome"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1850460","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=1850460"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1850460\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1850463"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1850460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1850460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1850460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}