Knock, knock! Who’s there? Well, it’s an unexpected piece of not-so-pleasant news: Americans are having a slightly tougher time paying their auto loans and credit card bills. Yep, that’s right. We’re not just talking small potatoes either. Current levels are reaching some of the highest we’ve seen lately – well, in a decade, to be specific. I don’t know about you, but I find that quite hard-to-swallow, in the same league as your car keys magically disappearing when trying to make it to that super important meeting on time.
Jeez! An Uptick in Auto Loan Blues?
Ever thought, why am I struggling to keep up with my car payment? No, it’s not just your bad luck nor that reckless spending spree last Christmas. Car prices have been reaching for the stars, thanks to a perfect storm of supply chain problems. Yes, indeed, both brand-new and used cars would cost you a pretty penny. And trust me, we aren’t talking ‘spare change’ pretty, but ‘your-entire-monthly-budget’ pretty. Subsequently, we innocents end up borrowing more, facing higher interest rates, and the music goes on.
In their defense, the folks over at the Federal Reserve did tell it like it is. Recent loans, they say, are dancing the debt jig a bit more than their earlier counterparts, all because consumers had to borrow more at higher rates. Fair. But that doesn’t make the monthly checque writing, or clicking, any warmer and fuzzier, does it?
Having Credit Card Payment FOMO?
Cut to scene 2, where credit card balances have skyrocketed up 14.5% in the past year. Inflation has led to the average Joe and Jane needing to tighten their belts while loosening their credit card spending, leading to bigger balances and wider eyes full of disbelief.
Most of us know that the gold star standard is to religiously pay off your credit card balance every month. But, life happens and if you can’t, do still remember to pay the minimum, okay? Late fees are never a good fashion statement nor a great addition to anyone’s budget.
Here comes the shocker – credit card debt that’s overdue by more than a month surged up to 8.5% in the last quarter of 2023. There’s an Olympic record! Sadly, it’s not a podium you want your name engraved on.
Believe it or not, we’re now replaying a scene from mid-2011. Late payments crossing the 90-day mark have reached their highest in over a decade for both credit cards and car loans. Oh, my stars and garters!
And it really gets my goat when the Federal Reserve casually mentions that lower-income and young households are currently the prime contenders for the ‘miss-a-payment and fall-behind-on-debt’ award. Bravo! Can’t they just ask people how they really feel? Nah, who am I kidding?
Could you use some Money Tips?
- Top 10 Auto Refinance Companies, February 2024. A lifeline if you’re in the red!
- Scoring an Auto Loan: Improve Your Odds. As rare as hen’s teeth, but you got this!
- The Lucky 13 Best Credit Cards of January 2024. Because options are your best friend!
If you’re in a pickle with over $20,000 in debt, Freedom Debt Relief can march in like your personal Superman. They’re your sidekick to guide you on the road to financial recovery.
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