“Under Kamala Harris, everything costs 20 percent more than it did under President Trump, working families are having to spend 30 percent more for baby food, and the price of
gasoline is up 50 percent. America cannot afford another four years of Kamala’s failed economic policies. President Trump has a proven track record of making this country prosperous and affordable, and Americans can trust him to put more money back in their pockets again,” said Karoline Leavitt, Trump Campaign National Press Secretary in a statement issued yesterday.
How are American families coping with the galloping inflation that has been draining their finances over the 3 ½ years Democrats have been in power in the White House? The principal way appears to be running up their credit cards to maintain their quality of life.
Financial news website CNET reported credit card debt in America continues to break records. After a brief payoff period during COVID-19 lockdown powered mainly by stimulus checks, our collective overall credit card bill became a 13-digit number last year, and now sits at $1.14 trillion according to the most recent Household Debt and Credit report from the Federal Reserve Bank of New York's Center for Microeconomic Data. Consumers typically make larger credit card payments in the first quarter, but both this year and last year the quarter-over-quarter balance remained nearly flat.
What's more alarming according to reporting by CNET’s Nick Wolny is that the cost of carrying this debt has also increased. Credit card APRs went up 30% in an 18-month period to the highest interest rate we've ever seen, rendering monthly payments less productive and eating away at consumers' budgets more than ever before.
When inflation hit a 40-year high in 2022, the Federal Reserve stepped in to try to slow down the economy. The central bank raised rates 11 times, driving up the cost of borrowing.
Anytime the Fed raises rates, a credit card provider will typically raise interest rates on their credit card products, too. Average APRs have spiked to over 20%, a 30% increase over the last year and a half, with retail card APRs at nearly 29%, and revolving credit card interest is the dominant profit driver for banks and lenders, reported Mr. Wolney.
How bad is this family financial crisis?
A Harris poll found that 43% of Buy Now Pay Later users were behind on payments and that a third of respondents had over $1,000 in outstanding BNPL loans.
And CNET reported about 55% of Americans live paycheck to paycheck, 36% have more credit card debt than emergency savings and 22% have no emergency fund at all. Many people lean into credit cards for emergency expenses not because they want to, but because they have to.
Over the past two years, credit card rates have increased by 500 basis points, reaching a record of 22.76% on average in May 2024, according to the Federal Reserve. Over that same timeframe, 44.7% of Americans increased their spending on credit cards, according to research by Lending Club Bank.
And the increase in expenses, i.e. inflation is the number one reason consumers give for falling behind on their credit card payments, car payments and student loans.
In a further worrying sign that Kamalanomics is killing middle income families, Market Watch reported about 9.1% of credit-card balances transitioned into delinquency over the last year, according to data released Tuesday by the New York Federal Reserve Bank. The level of newly delinquent debt — which describes card balances that are 30 or more days overdue — hasn’t been that high since 2011, when the U.S. was still recovering from the recession.
And this surge in credit card debt is beginning to have serious societal and political consequences. TheStreet.com reports nearly half (47%) of all consumers agree that their finances have negatively impacted their mental health, with many consumers noting the rise in consumer goods prices contributing to their debt.
The internet and financial media are awash in articles about how to pay off credit card debt, but it appears to us that the simplest and best way to lower the $6,000+ average credit card debt American families are carrying is to reelect Donald Trump and return our country to the low unemployment and growing real wages of the Trump economy.
2024 Election
Democrat contributions
Kamalanomics
25th Amendment
Stock Market Crash
recession
ActBlue donations
Donald Trump campaign
Kamala Harris campaign
Kamala Harris senate record
credit card debt
middle class
working class
Comments