Household debt is rising as are credit-card delinquencies. Where will this lead?
Credit-card delinquencies mean that not only is there more risk of economic damage to financial institutions, but retail will also be hit. Retailers depend on people spending money. Customers have had to use credit cards in order to make some of their purchases. Without easy credit, all of retail will be forced to adjust.
It will be a painful transition.
MarketWatch reports, “Household debt rises by $116 billion as credit-card delinquencies pile up.”
Household debt rose by $116 billion, or 0.9%, to $12.96 trillion in the third quarter, the New York Fed said Tuesday. That’s the highest level in nominal terms, though not when compared to the size of the economy. […]
Flows into credit-card and auto loans delinquencies rose, with 4.6% of credit card debt 90 days or more delinquent, up from 4.4% in the second quarter, and 2.4% of auto loan debt seriously delinquent, up from 2.3%.
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