Posts Tagged ‘credit cards’

“Tom and Kate know they have a serious debt problem…

They spend their lives in a constant state of stress – trying to figure out ways to juggle their debt. They consistently live beyond their means. The only thing that limits their spending is the limit on their credit cards.

Tom and Kate are in the top 15% of U.S. households, bringing home a combined $160,000 per year. Yet like many people, they’re deeply in debt… spending everything they make and borrowing even more.”

-Bill McGilton

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“In the final quarter of 2018, U.S. credit-card debt reached $870 billion – outpacing the recession – according to Bloomberg. The U.S. has added 100 million credit cards to its circulation since the financial crisis…there are nearly twice as many credit cards in use as there are adults to use them.” -The Crux

  • Despite the long bull market, more Americans today have more debt than money in the bank than at any point since 1962, according to Deutsche Bank.
  • American household savings levels are at levels last seen in December 2007… right before the economy slipped into a recession that spurred the global financial crisis.
  • And total U.S. consumer debt – credit cards, auto loans, and student loans – just surged by the most in two years to $3.8 trillion.
  • And government debt is creeping toward a $1 trillion deficit per year. The national debt has topped $20 trillion.

 

If these folks can’t save or make their payments in a strong economy… how will they do it when interest rates go up and the next inevitable recession hits?

The answer is that they won’t.

-Steve Longenecker

“As the Financial Times reported yesterday, more than 1 million U.S. consumers are ‘at least two months behind on car loan repayments,’ noting that the delinquency rate in the $1.1 trillion market hit its highest level since 2009. And that’s not just limited to subprime borrowers. That figure includes everyone with a U.S. car loan….

The financial Times also cites, ‘Delinquencies on credit cards also rose by about the same amount over the period to 1.79% – the highest since 2011. The rise in bad loans comes despite persistently low borrowing costs and unemployment levels – suggesting lenders may be letting consumers take on bigger debt burdens than they can handle.

Lending to consumers with weak credit scores has been one of the fastest-growing parts of the industry. Still, the increased delinquency levels follow a period of rapid expansion and could be a natural consequence of that growth. Separate figures published on Thursday by the New York Federal Reserve showed the total amount of debt held by American households rose last year at the fastest clip since 2007.'” -Porter Stansberry

Yes…times have rarely been better for bankers.  In total, household borrowing has climbed back to $12.1 trillion − the highest level in five years − with balances growing across the credit spectrum once again, including mortgages and credit cards.  Happy days….  Our bankers have been world-class in providing more capital than ever before for corporations and consumers.  They’re doing a splendid job.  Don’t hate the bankers.  They only did what the government told them to do.  Besides… it’s not their money.  It’s yours.” -Porter Stansberry

Imagined Money

Posted: December 2, 2015 in Money Matters
Tags: , ,

“It seems many people—who get a bunch of credit cards, enabling them to spend beyond their means—imagine they have money.” -Doug Casey