Debt

American Consumer Debt To Hit $4 Trillion By EOY

New data shows that Americans are on pace to accumulate a collective $4 trillion in consumer debt by the end of 2018.

LendingTree, the nation's leading online loan marketplace, released its first Consumer Debt Outlook for May 2018 — it found that collectively, Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010.

Consumer debt includes non-mortgage debts such as credit cards, personal loans, auto loans, and student loans.

Over the past five years, Americans have been accumulating more debt. Total non-housing debt is at 26 percent of Disposable Personal Income — higher than during the credit boom in the mid-2000s. And for nearly two years, consumer credit has grown at a steady rate of 5 to 6 percent annually.

Yet overall, the amount Americans owe on revolving credit (primarily credit cards) and non-revolving credit (like auto loans and student loans) fell by $2.9 billion in March – a less than 0.1 percent drop to $3.824 trillion. Revolving credit, primarily credit card spending, also fell by $8.1 billion to $976.6 billion, which is the second consecutive month of declining balances.

Still, LendingTree analysts expect the total amount owed will exceed $4 trillion by the end of the year.

As far as paying off that debt, the Federal Reserve's Survey of Consumer Expectations shows that consumers, on average, expected there was only a 10.72 percent chance they would miss a loan payment in the next three months — the lowest reading since the survey began in 2013.

However, data from the FCIC shows that overdue credit card debt has hit a seven-year high.

Consumers more than three months behind on their bills or considered otherwise in distress were behind on nearly $12 billion in credit card debt as of the beginning of the year — an 11.5 percent increase during Q4 alone.

And it’s not just the credit card debt — mortgage problem debt is up as well, 5.2 percent to $56.7 billion.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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