Household debt reaches 17.69 tons; credit card balances decline slightly

Phoenix(AZFamily) — Consumer household debt reached $17.69 trillion in the first quarter of 2024, according to the latest report from the Federal Reserve Bank of New York. It increased by $184 billion in the first three months of this year.

Mortgage debt increased by $190 billion, auto debt increased by $9 billion, and student loan debt fell by $6 billion. Credit card debt also fell by $14 billion, but consumers still have $1.12 trillion in credit card debt alone. An increase of 13% compared with the same period last year.

“One interesting thing is that after the holidays, people often do a little bit of a spending detox and use their tax refund funds to pay off credit card debt,” said Bankrate’s Ted Rossman. “We did see a slight decline, but not as much as we typically see. Big. This could be a sign of some trouble later in the year, as balances typically increase in the second and third quarters and then really increase in the fourth quarter around the holidays.

The latest inflation data from the U.S. Department of Labor showed that inflation cooled slightly to 3.4% in April, but inflation is still a major factor in the financial challenges faced by consumers.

“It can be concerning that Gen Z has more credit card debt and more credit card delinquencies than Millennials of the same age, and it's all wrapped up in all of these higher costs,” Rothman said. “But the bottom line is that , which really brings me back to the fork in the road: 56% of cardholders who pay in full are doing well and receiving rewards, convenience, and buyer protection, while the other 44% have a very expensive debt cycle.”

If you're one of the 44% of people who carry a credit card balance, there are solutions to paying it off. Evaluate monthly income and expenses and create a budget. Then cut costs and free up more money for your credit card balance.

Rothman also says that if you qualify, a 0% balance transfer credit card may help you pay off debt faster. There may be a 3-5% fee up front, but you'll save on interest if you pay off your entire debt before the promotional period ends.

“I still think it's very worthwhile as long as you can make progress,” Roseman said. “That's it. You don't want to just throw the can down the road.

The New York Fed report also highlighted an increase in serious delinquencies on mortgages, auto loans and credit cards that are 90 days or more past due.

See a spelling or grammatical error in our story? Please click here to report.

Do you have photos or videos of breaking news stories?transmit give us here with a brief description.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *