Bankrate’s Ted Rossman explains why debt continues to climb.
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00:00There's some interesting things going on with credit card delinquencies.
00:03I know the Philadelphia Fed recently said they're at an all-time high.
00:06That's in a data set that goes back 12 years.
00:09Other data sets have delinquencies backing off a little bit lately.
00:13Some companies, like American Express, actually say their delinquencies are lower now than they were pre-pandemic.
00:20So it's kind of a mixed bag.
00:21The bark is maybe worse than the bayid.
00:23I don't think it's quite as bad as some of the headlines make it appear.
00:27All news is local, though.
00:29I mean, we have some cardholders that are saddled with record amounts of debt.
00:33They're falling behind.
00:35Others are kind of humming right along.
00:37So overall, I don't see this as a threat to the economy or to card issuers, but they are tightening around the margins.
00:43There are some people with lower incomes and lower credit scores who are finding it harder to get credit because banks are worried they might not pay them back.
00:52Credit card debt usually has practical causes.
00:54Contrary to popular belief, it's not usually something silly like a vacation or a shopping spree.
01:00It's usually something practical.
01:02Emergency expenses are number one.
01:04That's medical bills, car repairs, home repairs, things like that.
01:08And then second place would be day-to-day expenses.
01:11That's been all too common the past few years with high inflation and the cost of living just going up.