Well, if you thought consumers were putting too much on the credit card during gradual rate normalization, then imagine what they would do during interest rate cuts. It seems our love affair with credit cards happens with high and low rates, as evidenced in a new study.
According to WalletHub, a personal finance website, U.S. consumers tacked on $35.6 billion in credit card debt during the second quarter of 2019, a record high for this time of the year.
The states with the largest Q2 debt increases:
– California
– Texas
– New York
– Florida
– Illinois
The states with the smallest Q2 debt increase:
– Vermont
– Wyoming
– South Dakota
– North Dakota
– Delaware
The same report also noted that consumers are expected to save $1.6 billion next year because of the Federal Reserve’s upcoming rate cut this month. Considering that most Americans think the rates are their loans are too high, many are probably welcoming the central bank’s rate cut.
“The fact that U.S. consumers added $35.6 billion in credit card debt to their tab during Q2 2019 is significant because that is an all-time record high for the second quarter of the year,” said WalletHub CEO Odysseas Papadimitriou. “Our overleveraging problem has been trending in the wrong direction for some time now, and the latest data indicate we’re truly entering dangerous territory.”
The debt monster is going to swallow everyone.
“The debt monster is going to swallow everyone.”
Not everyone, with retirement income of $35,000, in the last 18 months I have paid off $18,000 in CC debt and have transferred $10,000 in CC debt to zero interest accounts. Saving me Thousands in interest payments. All my CC debt will be paid off in Sept 2020 and I will have over $22,000 in savings. A first for me, since I got my first CC in 1986 at age 30. Just say no to credit card debt, it will lower your standard of living, not raise it.
I even purchased $2,440 in silver using a zero interest PayPal account, that is now worth $2,634. Debt free in 12 months, then I will be able to save and invest $15,000 per year.