US household debt reached a new all-time high in late 2022, driven in part by increased credit card use, but inflation and higher interest rates pose default risks.
The total amount of US household debt was $16.9 trillion in the fourth quarter of 2022, according to New York Fed data released Thursday.
That’s $394 billion, or 2.4%, more than in the third quarter, and $2.75 trillion more than at the end of 2019, before the Covid-19 pandemic hit the global economy.
Credit cards in circulation – widely used in the United States for all types of purchases – amount to 986 billion dollars.
Those of housing credit thus amounted to 11,920 million dollars. But sharp rate hikes on these loans since early 2022, in response to rate hikes by the US central bank (Fed) to curb high inflation, have slowed new mortgages, “after two years of record high levels.” volumes”.
Rising interest rates threaten borrowers
And the proportion of debt that has not been repaid “increased again in the fourth quarter for almost all types of debt, after two years of historically low defaults,” it specifies.
Source: BFM TV
