Household debt hit a new record high in the second quarter of 2017, and credit card delinquencies are on the rise, according to a new report from the Federal Reserve Bank of New York on Tuesday.
Tuesday's report marked the first time since 2009, when the country was still reeling from the financial crisis, that the economy saw a year-over-year rise in people falling behind on credit card payments. Economists at the New York Fed called the rise in credit card delinquency "potentially concerning, particularly in the context of a strong economy and low interest rates."
Record household debt isn't necessarily a bad thing. Researchers at the New York Fed noted that, unlike in 2008 when the level of debt first approached $13 trillion, there isn't a lot of questionable mortgage debt this time around.
But the rise in credit card delinquency, particularly a sharper uptick in the number of lower-credit borrowers more than 90 days behind on payments, is something to monitor because it should not be expected in a still-recovering economy that is adding jobs, the bank's economists said. A separate report released by the Fed's Board of Governors last week suggested that credit card debt hit a new record high in August.
1 comment:
You can add all the jobs you want, but until those jobs pay a living wage, you will still see plenty of people in trouble with credit card debt. Adding jobs doesn't change that the day is 24 hours, and the week is 7 days long, and a person can only work so much and needs to sleep on occasion. How is a person to make a living on a minimum wage that doesn't pay enough to rent an apartment?
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