Thursday, December 26, 2019

Americans’ near-record levels of credit card debt help bolster banking industry

I have been wondering how much consumer debt has been helping the economy. We've been thru this before, with debt fueling the economy, ending in an economic crash.

I use my credit card instead of debit card when I make a purchase too big for cash because if someone steals the credit card info, they can't clean out my checking account, as happened to several of my friends. This created a big problem for them until the bank was able to get it cleared up.

By Renae Merle
Dec. 26, 2019 at 10:55 a.m. EST

Americans have accumulated near-record levels of credit card debt over the past year as card companies have increased interest rates and fees.

The booming market is helping drive record banking industry profits but could become increasingly costly for consumers who don’t pay off their bill every month or miss a payment, industry experts say.


To be sure, despite increasing debt loads, delinquency rates remain relatively low. About 6 percent of consumers were late on a payment this year compared with 15 percent in 2009, according to WalletHub. And consumers have yet to balk at the relatively high interest rates, industry experts say.

Credit card debt as a share of disposable income has been flat for the past six years, and many consumers pay off their bill every month, the American Bankers Association said in a November report. “Consumers appear to be well-positioned to meet their financial obligations in the months ahead,” Dan Smith of ABA said in a statement.


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