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The New York Fed discovered this week, that since the epidemic, families had accrued credit card debt and experienced a higher percentage of delinquencies.

There are various reasons why credit card payments go unpaid, including financial difficulty and decreased income due to inflation. Under President Joe Biden, costs increased by almost 20% on average.

The Republican National Committee (RNC) calculated in May that the rising cost of living under Biden cost the average Wisconsin family an additional $21,981. In certain places, a medium fry meal, a medium beverage, and a McDonald’s Big Mac burger cost $18, an increase of $10 over the previous year while former President Donald Trump was in office.

The New York Fed released a study on the delinquent trend that stated, “For all debt outside of student loans, delinquency has been slowly climbing since the fourth quarter of 2021, following unprecedented lows during the COVID-19 epidemic.” “In particular, credit card delinquencies have surpassed pre-pandemic levels.”

Last quarter, almost 120,000 Americans received a bankruptcy notice on their credit reports. About 4.8% of Americans had debt in third-party collections.

In the three years when Biden’s inflation affected households, family debt in the US increased by 25%. This indicates that Americans are utilizing debt as a hedge against inflation, according to other research from the Fed.

Bloomberg stated that the Fed’s research revealed that younger borrowers and those with lower salaries are more likely to experience financial stress than older borrowers and those with higher incomes, who could have access to more credit.

According to the Fed’s research, the percentage of credit card debt that moved into substantial delinquency increased to 6.9% from 4.6% in the previous quarter. Additionally, 9.9% of credit card debt for users between the ages of 18 and 29 was very delinquent.”

“Housing debt is the largest category of household debt.”It represents almost 70% of the total. “Despite the fact that debt is doing well, people are using home equity loans more frequently to access their acquired value.”

“The amount of outstanding student loan debt remained at $1.60 trillion, essentially constant. It is challenging to estimate how much of that debt is past due because credit bureaus do not record late federal student loan payments until the fourth quarter.

According to a recent Financial Times/Michigan Ross survey, the majority of respondents (51%) think that Biden’s economic policies have worsened their financial situation. The poll revealed negative findings regarding Biden’s chances of winning reelection.

Just 28% of voters believed that Biden’s economic policies improved their financial circumstances.

Seventy-one percent stated that the state of the economy is bad. Rising costs are one of their major difficulties, according to 80% of respondents.

Less than six months before November’s presidential election, the Times said that the survey findings “show people are still blaming Biden for rising consumer costs, such as those for gas and food.”

Author: Blake Ambrose


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