Money

Paying your credit card bill is about to get harder

Published

2 years ago

September 5, 2023

ticker NEWS

Inflation in the United States is posing severe financial challenges for Americans, resulting in a surge in defaults on credit cards and auto loans.

The relentless rise in inflation is taking a toll on Americans, particularly those with lower and middle incomes. Despite the Federal Reserve’s efforts to combat inflation, essential expenses such as rent, groceries, and the cost of both new and used cars continue to soar.

Credit agency Equifax reports that credit card delinquencies have surged to 3.8%, with a default rate of 3.6% on auto loans. These figures mark the highest levels witnessed in over ten years.

Many individuals, having exhausted their savings from government stimulus checks issued during the pandemic, are resorting to opening new lines of credit. This trend persists despite the fact that the average interest rate on credit cards has reached an unprecedented 20.6%, according to Bankrate.com.

$1 trillion debt

Since the pre-pandemic year of 2019, the number of open credit card accounts has surged by a staggering 70 million. This surge in borrowing has pushed the total credit card debt in the nation past the historic milestone of $1 trillion.

The Federal Reserve is contemplating raising interest rates to combat inflation, aiming to bring it down from its current level of 3.5% to the target rate of 2%. If these hikes occur, it could lead to even higher interest rates on credit cards, exacerbating borrowers’ financial difficulties.

As the moratorium on student loans, in place for more than three years, comes to an end, individuals already grappling with high rent and grocery costs will face the added burden of student loan payments starting next month.

While the Federal Reserve views these challenges as a rationale for raising interest rates to limit consumer spending, there are apprehensions that consumers may accumulate more debt during the holiday season, further compounding their financial woes.

Retail giants like Macy’s and Kohl’s have reported an uptick in delinquency rates among customers who hold private label store cards, underscoring the financial stress experienced by consumers.

Money

Secret IMF meeting sparks US-China truce

Covert IMF meeting sparks US-China trade breakthrough with 115-point tariff cut for 90 days, marking significant progress since the Trump trade war.

Published

15 hours ago

May 14, 2025

ticker NEWS

Covert IMF meeting sparks US-China trade breakthrough with 115-point tariff cut for 90 days, marking significant progress since the Trump trade war.

A covert meeting in the basement of the IMF has set off a diplomatic shockwave, leading to a major breakthrough in US-China trade talks.

Top officials from both nations have now agreed to slash tariffs by 115 points for 90 days—marking the first real progress since the Trump-era trade war began.

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Money

Gen Z and millennials surpass boomers in voting power

Gen Z and Millennials outnumber Baby Boomers in Australian elections, signaling potential reforms in taxation and inheritance laws.

Published

2 days ago

May 13, 2025

ticker NEWS

Gen Z and Millennials outnumber Baby Boomers in Australian elections, signaling potential reforms in taxation and inheritance laws.

For the first time in history, Gen Z and Millennials now outnumber Baby Boomers at the ballot box in Australia, marking a seismic change in the country’s political landscape.

Experts say this electoral milestone could spark major reform debates on taxation, superannuation, and inheritance laws as younger voters prioritise different values.

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Money

Stocks decline as tariffs and trade tensions escalate

Stocks drop as tariffs worry investors; gold hits record high; Canada resists U.S. annexation talk.

Published

1 week ago

May 7, 2025

Ahron Young

Stocks drop as tariffs worry investors; gold hits record high; Canada resists U.S. annexation talk.

In Short:
Stock indexes declined on Tuesday after a nine-day winning streak, while gold prices soared amid economic concerns. Major companies like Ford and Mattel adjusted forecasts due to tariff impacts, and the trade deficit hit a record high of $140.5 billion.

Stock indexes fell on Tuesday, following declines in the Dow and S&P 500 after a nine-day winning streak.

Gold prices reached a new record as markets reacted to ongoing economic concerns.

The downturn persisted following a meeting between Canadian Prime Minister Mark Carney and President Trump, where Carney rejected any notion of Canada being for sale.

Investors showed continued apprehension about the impact of U.S. tariffs and the absence of new trade agreements, particularly as major companies like Ford and Mattel suspended annual guidance due to tariff uncertainties.

Ford impact

Ford, while less affected than competitors, estimated potential tariff impacts could reduce profits by $1.5 billion, prompting a 2.8% increase in its stock.

In contrast, Mattel’s stock rose by 2.6% after it signalled a potential increase in U.S. toy prices, anticipating a $270 million hit from tariffs, while also planning to move manufacturing from China.

Both WK Kellogg and Marriott International adjusted their financial forecasts downward due to tariff-related challenges and broader economic uncertainties.

Clorox shares fell sharply after the company updated its guidance to reflect tariff impacts.

Additionally, President Trump indicated he would announce the details regarding pharmaceutical tariffs within two weeks.

On a related note, new data revealed the trade deficit reached a record $140.5 billion in March, exceeding economists’ expectations and reflecting a surge in imports amid trade policy changes.