Credit Card Delinquencies Continue to Rise in the U.S., and Whose Fault Is It?

Since the start of the pandemic in 2020, personal savings (PSAVE) have declined sharply until Q3 2023, resulting in a decrease in the average American's savings.

It is worth noting that there has been a rise in delinquency rates in 2023, which can be attributed to various factors, including credit card usage. This trend is particularly noticeable among lower-income individuals.

Moreover, Americans with combined student and auto loan debts are experiencing increased credit card delinquency.

The current issues have raised a question that many people ask: Whose fault is it? Unfortunately, the answer may not be what people want to hear. Often, the cardholder's mishandling of credit and their lack of financial education leads to these issues. However, it is essential to note that this is not an attack on the average American with outstanding credit card debt. Instead, it is a wake-up call for the average credit card user. Here are some ways to rethink your relationship with credit cards:

1. It is not your money: During our consultations at Greenpoint Knowledge Venture LLC., we advise clients that credit cards can be used to establish relationships with banks and lenders.

2. Use the incentives, not the debt: Credit cards can offer many benefits if used wisely. Some credit cards come with cash-back rewards, flight bonuses, and concierge services. However, to avoid any negative consequences, it is important to maintain a good payment record by paying your monthly balances in full.

3. If you are not good with credit cards, do not use them. You know the saying, "It is not you, it is me…" If you are late or behind on credit card payments, our advice is not to use them! If not used strategically, credit card debt can have long-term effects on your credit and personal life and may lead to bankruptcy. 

So whose fault it is? The question solely depends on the individual. Based on the data on high credit card delinquencies, we may see a tightening of credit limits, stronger admissions to credit, and the possibility of government regulation. 

Do you want to learn about financial education or business funding? Contact us at Greenpoint Knowledge Venture LLC.