Interesting Stats on the Average Consumer

[am_vanquish]

Article summarizing the findings of quarterly report by the Fed which covers household debit and credit. Article can be found here.

Halfway through this year, 11.4 percent of outstanding consumer debt was delinquent, up slightly from 11.2 percent a year earlier. An astonishing $1.3 trillion of consumer debt is delinquent, with $986 billion seriously so — 90 days late and counting. While delinquent balances are down by about 3 percent from the same period last year, serious delinquencies are up a bit more — 3.1 percent.

I found many of these stats surprising, especially when considering the widely quoted fact that our savings rate has climbed (albeit, only due to huge write-offs of toxic debt by big banks).

[wincrasher]

The numbers are alarming. Even with all the support the Fed provided, loans and almost permanent zero interest rates, the banking sector is in a precarious situation. They want to project strength, because that is what customers expect. You can't hide the numbers though. The real story is that the worst is not yet behind them. The leadership of these banks will do anything to protect their fat paychecks, so they pay back the Fed even though they have enormous losses ahead. Squeeze the customers, the tax payers, and screw their shareholders. Just keep those bonuses coming!

[am_vanquish]

Another thing I've noticed recently: wild swings in economic "data" ....

On that note, here's another article I found today indicating credit card debt is at the lowest level in 8 years. The subtitle on Yahoo!Finance for this one reads "Credit card debt drops 13 percent in 2nd qtr to lowest level since 2002; late payments decline". Article is here. Looks like this might be counting only credit card debt, while the previous report was counting all debt.

So, to recap ...

Article #1 says:

Halfway through this year, 11.4 percent of outstanding consumer debt was delinquent, up slightly from 11.2 percent a year earlier. An astonishing $1.3 trillion of consumer debt is delinquent, with $986 billion seriously so — 90 days late and counting. While delinquent balances are down by about 3 percent from the same period last year, serious delinquencies are up a bit more — 3.1 percent.

Article #2 says:

More borrowers also made payments on time. The rate of cardholders past due by 90 days or more fell to 0.92 percent in the second quarter, from 1.17 percent last year.

So, apparently, the # of accounts delinquent has fallen, but the balanace of accounts still delinquent has risen. Apparently DR's advice of paying off all your debts in order of smallest balance to largest balance is catching on ... (but maybe they missed the part where you're still supposed to pay the minimum on the accounts with larger balances).