Americans are falling\u00a0deeper into debt<\/a>, but not across the board.<\/p>\n Collectively, credit card<\/a>\u00a0balances rose by $24 billion in the third quarter to $1.23 trillion \u2014 up 5.75% from a year earlier to a fresh\u00a0all-time high, according to a\u00a0new report on household deb<\/a>t<\/a>\u00a0by the Federal Reserve Bank of New York released Wednesday.<\/p>\n The average credit card balance per consumer now stands at $6,523, up 2.2% year over year, a separate quarterly credit industry\u00a0insights report<\/a>\u00a0from TransUnion also found.<\/p>\n However, despite the overall uptick,\u00a0there is a growing divide among consumers, TransUnion found. \u201cSome demonstrate heightened financial resilience while others face mounting challenges,\u201d the report said.<\/p>\n<\/div>\n Roughly 175 million consumers have credit cards. While some pay off the balance each month, about 60% of credit card users have revolving debt, according to the New York Fed. That means they pay the equivalent of about 20% a year, on average, on the balances they carry from month to month \u2014 making their credit cards one of the most expensive ways to borrow money.<\/p>\n<\/div>\n More borrowers are now either superprime, with a credit score of 780 or higher, or subprime, with a credit score below 600, according to Charlie Wise, TransUnion\u2019s senior vice president of global research and consulting.<\/p>\n That\u2019s creating an increasingly bifurcated consumer economy<\/a>. <\/strong>\u201cWe are seeing a divergence in consumer credit risk, with more individuals moving toward either end of the credit risk spectrum,\u201d Jason Laky, executive vice president and head of financial services at TransUnion, said in a statement.<\/p>\n Increasingly, consumers now score in the highest and lowest score ranges<\/a>, an earlier report by FICO also found. FICO is the developer of one of the scores most widely used by lenders. FICO scores range between 300 and 850.<\/p>\n<\/div>\n In the so-called\u00a0\u201cK\u201d-shaped economy<\/a>,\u00a0some borrowers are in financial distress while others have strengthened their financial position, largely by benefiting<\/a>\u00a0from stock market rallies and appreciating home values.\u00a0<\/p>\n Wealth has risen fastest for those at the very top, other data from the Federal Reserve also shows, as the value of their investment holdings continues to grow. The top 10% of Americans hold over 87% of corporate equities and mutual fund shares<\/a>.<\/p>\n On the other side of the divide, separate studies show large pockets of heightened financial strain.<\/p>\n<\/div>\n Beyond rising debt balances, 38% of consumers said it\u2019s \u201cdifficult\u201d or \u201cvery difficult\u201d to pay bills on time. Among those falling behind, 67% cite insufficient income, according to a survey by debt management company Achieve released Friday.<\/p>\n The federal government shutdown<\/a>, which has now stretched past a month, has only added to the pressure on low-income families by affecting critical government programs, including\u00a0SNAP food benefits<\/a>.<\/p>\n \u201cThe volatile combination of consumer debt, inflation hangover on prices, elevated interest rates and the shutdown could leave a lasting economic impact, particularly for those more at-risk American households struggling to make ends meet,\u201d said Brad Stroh, Achieve\u2019s co-founder and co-CEO.<\/p>\n<\/div>\n \u201cEven though they have a job in most cases, their purchasing power is no longer rising,\u201d Mark Zandi, chief economist at Moody\u2019s, said of Americans who are struggling.<\/p>\n Because wage gains have largely not kept pace with stubborn inflation<\/a>, \u201cmany are borrowing money to supplement their income and now they are paying interest on that debt,\u201d Zandi said.<\/p>\n \u201cThey owe a lot of money, but they own very little,\u201d he said.<\/p>\n Subscribe to CNBC on YouTube.<\/strong><\/em><\/a><\/p>\n<\/div>\n<\/div>\n\nRead more CNBC personal finance coverage<\/h2>\n
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\u2018A divergence in consumer credit risk\u2019<\/h2>\n
![\"How](\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/108199452-1758042135344-gettyimages-2235766893-_d1_5692_fucrsiu3.jpeg?v=1761674882&w=750&h=422&vtcrop=y\")
Inflation, debt and the shutdown: A \u2018volatile combination\u2019<\/h2>\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Americans are falling\u00a0deeper into debt, but not across the board. Collectively, credit card\u00a0balances rose by $24 billion in…\n","protected":false},"author":3,"featured_media":37739,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-37738","post","type-post","status-publish","format-standard","has-post-thumbnail","category-investing","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/37738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37738"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/37738\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/37739"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}