Why, in the middle of one of the longest bull market in history, is the default rate on credit cards on the rise?
Joe Resendiz, analyst with ValuePenguin.com, says several trends may explain the phenomenon.
“Purchase volume is up, which means that Americans are spending more on their credit cards and the average credit card debt is on the rise for the average American. And, you also have to keep in mind, the interest rate hikes that have been happening with the Fed certainly play a role, especially with people who already have existing credit card debt. The average credit card debt in the last year has gone up 9 percent.”
He says the average American has 3 credit cards with a combined balance of $6,000.
And the trend is not going in a positive direction.
“A recent survey conducted this year said that when you look at the number of consumers who report being debt-free, it’s actually dropped from 27 to 23 percent.”
Joe Resendiz was a guest on McIntyre in the Morning.
By Sandy Wells
KABC News