Credit Card Debt is back!

Record card adoption in the past year, increased spending, and the economy has pushed card balances to $916 Billion last month. During the height of the COVID Pandemic in 2020-2021 consumers pulled back on spending and debt levels fell significantly, but in the past year with record credit card issuance, the rising costs of goods and services, inflation and the rush to get back life back to normal, consumers have been increasingly spending more and adding more debt to credit cards,. Credit cards companies have incentivized new signups through better bonuses and less stringent underwriting standards. In the first seven months of the year alone, banks issued 47 million credit cards, an increase of 17% from the previous year. This rapid rise in credit card debt levels could result in increased losses for the credit card companies. The number of accounts that are past due 60 days or more reached 1.80% in September, up nearly 36% a year ago. It’s below pre-pandemic delinquency rate, but credit card companies expect it to keep rising.

Most economists foresee a recession that will last way into 2023 and this will have a huge impact for small and medium size businesses that are still trying to recover from the Pandemic. We are always keeping an eye on market to find ways to help our clients reach more clients and grow their business. Stay tuned here for information that we hope will help you make better decisions for your business.