A growing number of Americans are maxed out on credit cards, with Gen Z leading the way


Olde Hornet

Well-Known Member

A growing number of Americans are maxed out on their credit cards.

Nearly one-fifth of credit-card borrowers were using at least 90% of their available credit in the first quarter of 2024. The New York Fed called attention to America’s “maxed-out borrowers” in a report this week.

Credit card balances, and attendant delinquencies, have been rising steadily since late 2021, a sharp reversal from the historic lows recorded at the pandemic’s peak. Delinquencies have risen past pre-pandemic levels, the Fed reports.

Maxed-out cardholders are far more likely to miss payments. Borrowers who became delinquent in early 2024 had a median “utilization rate” of 90% on their cards: On average, they were pretty much maxed out.

“This makes sense,” the Fed report states, “since using practically all of your available credit could indicate a tight cash-flow situation.”

The nation’s collective credit-card balance stands at $1.12 trillion, near a record high, the Fed reports. The average card carries an interest rate of 21.6%, an all-time high. The average card balance was $6,360 at the end of 2023, according to TransUnion, another all-time high.
 

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The truth is Americans have always had bad credit. Let's be honest if you were born before 1980 there is a great chance you had a light bill, phone bill or credit at the local corner store in your name that you never knew about. 😂 The black community has turned lemons into lemonade for decades.
 
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