PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Total Household Debt Reaches $17 Trillion

By Josh Einis
May 18, 2023
in Analysts Coverage, Debt
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
household debt Inflation: Risk Credit Debt, economic stress

Inflation: 7% Rates Will Haunt CC Users and Bring Risk to Credit Quality and Debt

Consumers in the U.S. continue to struggle with payments, as interest rates and inflation plunge households further into debt. According to new data from the Federal Reserve Bank of New York, U.S. household debt has reached $17 trillion in the first quarter of 2023.

The research is based on the New York Fed Consumer Credit Panel, which draws data from anonymized Equifax credit reports, this report provides valuable insights into the state of the economy and its impact on American households.

Record Levels of Debt

According to the Federal Reserve, aggregate household debt balances have increased by $148 billion in Q1 2023, a 0.9% rise from the previous quarter. This brings total balances to $17.05 trillion, representing a $2.9 trillion increase since the end of 2019, just before the pandemic-induced recession. While growth in mortgage balances has been relatively modest, other forms of debt, including home equity lines of credit (HELOC) and auto loans, have shown consistent upward trajectories.

The data also highlights a reduction in mortgage originations during Q1 2023, reaching the lowest point since Q2 2014. However, auto loan originations remained elevated compared to pre-pandemic volumes. These insights indicate potential shifts in consumer preferences and financial priorities, which could influence the development of new payment solutions and lending models.

The Federal Reserve Bank of New York also provides valuable data on delinquency rates and public records. While delinquency rates remained low and roughly flat in Q1 2023, the transition rates into early delinquency for credit cards and auto loans increased.

Inflation—A Global Problem

We’ve previously covered how credit card balances are increasing as inflation grows, and how more Americans are struggling with increasing costs and decreasing savings.

Cost-of-living is becoming a growing issue, and not just in the U.S. In the UK, for example, keeping up with the rising cost of goods is leaving some people to shoplift—or in many cases—turn to buy now, pay later (BNPL) services to divide up their payments in smaller installments to help during this difficult time.  

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Credit CardsFederal ReserveHousehold incomeInflation

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    Proof That Fintechs Are Disrupting Banks:

    In Today’s Fintech Market, Value Is Everything

    August 30, 2024
    DFAST test

    Dodd-Frank Stress Tests: Good News for Now, Watch for a Rugged 2025

    August 29, 2024
    Real-Time Payments Adoption in the U.S. Requires a Pragmatic Approach, ISO 20022 messaging challenges

    ISO 20022 Brings the Challenge of Standardization to Swift Participants

    August 28, 2024
    open banking small banks credit unions

    Open Banking Can Be an Equalizer for Small Banks and Credit Unions

    August 27, 2024
    Payments 3.0

    Achieving Seamless and Holistic Transactions with Payments 3.0

    August 26, 2024
    embedded finance, ecommerce, consumers reduce spending

    Quality Over Quantity: Key Priorities in the Payment Experience

    August 23, 2024
    bots fraud

    Next-Generation Bots Pose Formidable Fraud Challenge

    August 22, 2024
    crypto custodians

    Crypto Custodians Could Bring a Revolution in Holding Assets

    August 21, 2024

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Digital Assets & Crypto
    • Debit
    • Digital Banking
    Menu
    • Commercial
    • Credit
    • Digital Assets & Crypto
    • Debit
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    Menu
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    Menu
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result