(Natural News)—As rising inflation under President Joe Biden devastates Americans’ paychecks, people are now charging necessary purchases on their credit cards. This has resulted in skyrocketing credit card debt – and has even surged to the highest year-over-year (YOY) leap on record.
According to the Federal Reserve Bank of New York’s (New York Fed) Quarterly Report on Household Debt and Credit released Nov. 7, credit card balances hit a new high of $1.08 trillion during the third quarter. This grew from a mere $48 billion from the previous quarter, and jumped by a record $154 billion compared to the number from a year ago.
This huge YOY leap is the biggest since the New York Fed began tracking household debt and credit data in 1999. Its report also found that household debt grew by 1.3 percent to $17.29 trillion in the third quarter. (Related: Americans’ credit card debt reaches a record-setting $1 trillion in the face of inflation and rising expenses.)
“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP [gross domestic production] growth,” said New York Fed economic research advisor Donghoon Lee. With this enormous surge in credit card debt comes a greater degree of delinquency as Americans strive to pay their bills. Defaults of 90 days or more were at their maximum rates in 2011.
Credit card delinquency rates increased at all levels, especially among millennials
Moreover, the New York Fed report noted that credit card delinquency rates have increased at all levels. This rate was higher among millennials – borrowers between the ages of 30 and 39 – who are already reeling from high interest rates of student loan debt.
With most people feeling stressed by bigger prices – specifically for food, gas and housing – more cardholders are taking debt from month to month or lagging on payments, and a higher percentage of balances are going more than 180 days delinquent, based on a separate report from the Consumer Financial Protection Bureau.
The consumer watchdog said almost one-tenth of credit card users discover themselves in “persistent debt,” where they are charged more in interest and fees every year than they pay toward the principal – a pattern that is increasingly hard to break.
“It’s a big deal, remarked Bankrate senior industry analyst Ted Rossman. “Your credit card is probably your highest cost debt by a wide margin.”
But LendingTree Chief Credit Analyst Matt Schulz said consumers often turn to credit cards despite the steep cost, partly because they are more accessible than other kinds of loans. He warned, however, that this comes at the cost of other long-term financial goals.
“That’s money that doesn’t go to a college fund, down payment on a home purchase or Roth IRA,” Schulz added.
Until recently, most Americans benefited from a few government-supplied safety nets, This injection of a considerable amount of stimulus money left several households sitting on a supply of cash that enabled some cardholders to maintain their credit card balances in check. But now, that cash reserve is mostly gone after consumers slowly spent down their surplus savings from the Wuhan coronavirus (COVID-19) pandemic years.
“Consumers are maintaining and supporting their lifestyles using credit card debt,” remarked Debt.com founder and certified public accountant Howard Dvorkin.
Even so, consumer credit scores have stayed high, supported by a strong labor market and cooling inflation, in addition to the removal of definite medical collections data from consumer credit files based on current reports.
Schulz advised credit card holders who are carrying a balance to try calling their card issuer to ask for a lower rate, combine and repay high-interest credit cards with a lower-interest home equity loan or personal loan, or switch to an interest-free balance transfer credit card.
Mike Townsend, senior public relations director for the American Bankers Association, also gave some bits of advice for cardholders. He urged them to maximize the benefits of their credit card, compare credit card offers frequently, pay off as much of their balance as they can as soon as they can and refrain from paying their bill late.
Follow DebtBomb.news for more news about Americans’ credit card debt. Watch the video below about the soaring credit card defaults and interest rates that hit their highest mark in U.S. history.
This video is from the Thisisjohnwilliams channel on Brighteon.com.
More related stories:
- Americans falling behind on credit card and loan payments as inflation persists.
- As the economy implodes, credit card balances are increasing at the fastest pace in U.S. history.
- Credit card debt SURGES to record-high $930.6 billion and will keep increasing due to inflation, interest rates.
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Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
