Quote:
Originally Posted by AmeliaG
This is a good thing. You have to keep in mind that the total debt figures include amounts that the user will pay off in full when their statement cycles.
People actively using charge cards means that commerce is happening. That amount growing probably says more about consumer confidence than impending disaster.
A lot of small businesses charge their credit cards up each month and then pay them off each month before incurring finance charges. This establishes creditworthiness and gives an operating capital buffer.
Access to capital is crucial for business and small business often has easier access to credit card debt than other types.
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I like your optimism but we've just reached 2008 financial crisis levels in the consumer credit sector with higher borrowing and less credit being given and increased delinquencies:
"..other forms of borrowing rose including that of credit cards, which at $870 billion matched its pre-crisis peak in 2008."
"However one sign of consumer demand, credit inquiries, slipped in the second half of 2018 to the lowest level recorded in history by the New York Fed."
"Another signal of weaker demand, the closing of credit cards and other accounts, jumped to its highest level since 2010, while flows into serious delinquency for credit cards rose 5 percent."
Another red flag is in the auto consumer lending sector. We've reached an all time record of auto loan delinquencies of 90+ days. 7,000,000 delinquencies. 90 days is the point of vehicle reposessed.
https://www.washingtonpost.com/busin...=.cb148dc11b19