Debt Relief Services West Palm Beach, Florida
As per the “Credit Access Survey” released in December 2018, credit-card rejection rates and involuntary account closures are on the rise. The Federal Reserve Bank of New York believes that this is a concerning trend given the strength of the economy and comparatively low interest rates. However, these trends seem to indicate that lenders are bracing for an economic downturn and paring back risk accordingly after years of credit-card companies issued debt too freely. Source.
What does this mean for you?
- Your debt is growing!
As a consumer, you have two types of debt: credit cards (revolving) and fixed-payment loans (non-revolving). Mortgages are also an enormous loan, but they aren’t a type of consumer debt. Instead, they are personal investments in residential real estate.
As of April 2019, U.S. consumer totaled $4.07 trillion. Of this, $3.005 trillion was non-revolving debt, while credit card debt totaled $1.065 trillion. What does your debt currently stand at? Source.
- Want to know where your money is going?
As of August 2018, Americans paid $104 billion in credit card interest in the previous year. At 15.5%, the average interest rate is up 300 basis points over the past five years, and American consumers continue to borrow. Do you know how much you paid? Source.
- Pay more to borrow more!
With the Federal Reserve hiking the rates for the ninth time since December 2015, the Federal Reserve Bank’s key overnight lending rate now stands at 2.25 percent to 2.50 percent. This means that if you need to pay back a credit card loan on variable interest, your debt is getting more expensive with each hike in rate. In the event of another rate hike, what is your plan to make your credit card payments? Source.