Credit Card Defaults Up 50% Over Last Year
The $1 coffee at McDonalds is now $1.69. The $2.79 McGriddle is now $5.39. Imagine taking your family of 4 to McDonald’s for a simple breakfast and having a $40 bill! And bird flu has now pushed eggs up near $5 per dozen. And a T-bone steak at the butcher is $26 for 1 steak! The Biden government wants to insist that inflation isn’t really a problem and maybe that’s one reason he lost. People living check to check with no savings have no choice but to borrow money and hope for a better tomorrow. So when the payments go into default to the tune of $46,000,000,000 we can say, “Houston, we have a problem.”
Update; today, 1/6 25, I ran across a headline, The Price of Breakfast is Obscene, so will post it here to back up my McDonald’s story from yesterday.
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The bad credit forced lenders to collectively write off a whopping $46 billion in loans that are considered seriously delinquent in the first nine months of 2024.
Based on data compiled from the Federal Deposit Insurance Corporation (FDIC) and the US banking industry information platform BankRegData, the figure represents a 50% year-over-year increase.
According to BankRegData, Capital One customers are facing the highest credit card delinquencies, with a total delinquent amount of $7.68 billion, representing 5.36% of their credit card loans.
Next is Citibank with $4.79 billion (2.93%) in delinquencies, followed by Synchrony Bank at $4.50 billion (5.02%), JPMorgan Chase at $4.10 billion (2.16%), Discover Bank at $3.9 billion (3.93%) and Bank of America at $2.56 billion (2.54%).
The rapid rise in credit card loan defaults is a sign of strained consumer finances after years of high inflation and the subsequent rise in interest rates.
Mark Zandi, head of Moody’s Analytics, tells FT that consumer spending power has clearly diminished in most households.
posted by Dennis at
7:04 AM
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