The article states that consumers are spending more, and this trend persists even as the inflation rate is decreasing. The consumer price index, which is a primary measure for inflation, has generally decreased to 3.4% in December 2023 from a 9.1% peak in June 2022. Lower inflation has not necessarily reduced prices. As a result, many consumers are falling behind on credit card payments. Credit card delinquency is up across the board, with a 50% increase in 2023 alone. “Serious delinquencies,” which means payments are 90 days or more overdue, have reached their highest level since 2009. Ted Rossman, senior industry analyst at Bankrate, has mentioned that Cardholders who pay their bill in full every month reap the benefits of cash back and travel rewards without paying interest. Meanwhile, The average credit card charges a record-high 20.74% interest as of May 2023. Overall, in the fourth quarter of 2023, an added 20.1 million new credit accounts were opened, partially by subprime borrowers seeking additional liquidity. This general default has been ascribed to the millennial group, who are burdened by student loan repayments and surging housing costs.
Credit card delinquency has become an increasingly important problem as more people are unable to pay off their credit card debts each month. However, you can try a 0% balance transfer credit card or refinance into a lower-interest personal loan. At just under 12%, on average, personal loan rates are still well below what you currently have on your credit card. 76% of people who asked for lower rates on their credit cards in the past year actually got them.
Overall, high levels of consumer spending continue to drive continued inflation, causing increased financial strain on cardholders. Many people have not been able to keep up with their monthly credit card payments, leading to an increase in delinquency rates. Meanwhile, it is essential for people to consider the options of transferring their existing credit card balance to a 0% interest credit card and refinancing into a lower-interest personal loan. These measures can help to alleviate the financial burden on consumers who are struggling to keep up with their existing credit card debt. In light of the rising costs, it is recommended to pursue strategies to minimize interest and monthly payments.
