17 trillion dollars. This is the size of the debt load of U.S. households in 2024. As a society, we’re in the midst of the greatest debt bubble in history, and it’s getting bigger and bigger with each passing month.
We have witnessed previous generations achieving their financial goals much earlier in life. Back then, the economy was quite different, and their standard of living was far higher than ours.
Now, just in order to make ends meet Americans have been borrowing and spending like never before. But it seems that a day of reckoning is fast approaching.
Fresh numbers released by the New York Fed revealed that in the last quarter alone, household debt increased by a whopping 184 billion dollars, led by the jump in mortgage balances as interest rates continue to soar.
If we were able to manage this enormous debt, there wouldn’t be much cause for alarm. But new data shows that we can not, and now a massive wave of delinquencies is expected to emerge.
In fact, the proportion of credit card balances in serious delinquency has climbed to the highest point since the aftermath of the Great Recession.
With Americans battling with high inflation and interest rates, a growing number of cardholders are falling behind on their monthly credit card payments right now.
At this point, the number of people who can’t afford to pay their credit card balances in full every month has already surpassed pre-pandemic levels, and the flow of credit card debt moving into delinquency hit 8.9% in the last quarter at an annualized rate, compared with an 8.5% rate the previous quarter and 5.87% at the end of 2023.
