Consumer debt in the United States has reached a new high of $16.9 trillion, according to data released by the Federal Reserve Bank of New York. The data, which covers the fourth quarter of 2022, also revealed that delinquency rates have risen, with 6.3% of all debt payments at least 90 days past due.
The increase in consumer debt is largely driven by a surge in mortgage and auto loans, as low interest rates have encouraged consumers to take on more debt. However, credit card debt has also been increasing, with the average credit card balance per borrower reaching $6,584 in the fourth quarter, up 5.1% from a year earlier.
The rise in delinquency rates is a cause for concern, as it suggests that some consumers may be struggling to keep up with their debt payments. This could be due to a variety of factors, including job loss, illness, or unexpected expenses.
The Federal Reserve has indicated that it will continue to monitor the situation closely, and may take steps to address any risks to financial stability. However, experts warn that consumers should also take steps to manage their debt and avoid falling behind on payments.
One strategy is to create a budget and prioritize debt payments, focusing on high-interest debt first. Consumers may also want to consider debt consolidation or refinancing, which can help to lower interest rates and reduce monthly payments.
In conclusion, the record high consumer debt and rising delinquency rates are a cause for concern, as they suggest that some consumers may be struggling to keep up with their debt payments. While the Federal Reserve is monitoring the situation, consumers should also take steps to manage their debt and avoid falling behind on payments. This includes creating a budget, prioritizing debt payments, and considering debt consolidation or refinancing