The financial warning bells are ringing louder than ever, as the net charge-off rate for credit cards in Q2 2024 skyrockets to 4.82%—the highest level seen since the third quarter of 2011. This isn’t just an alarming statistic; it’s a stark indicator that many Americans are teetering on the edge of financial collapse. Credit card defaults are spiking, and households are struggling under the weight of mounting debt.
Meanwhile, the personal saving rate has plummeted to a mere 3.5%, hovering near historic lows. With disposable income shrinking, people are setting aside less for the future, leaving them more vulnerable to economic shocks. This low savings rate reflects a grim reality: many are living paycheck to paycheck, unable to build the financial buffer needed to weather rising costs and high interest rates.
Based on @ABSStats latest National Income data and extrapolating population growth since Dec-23 by 260,000 real gross disposable household income per capita is at 2010 levels. pic.twitter.com/yvsKV5Tg2l
— $in¢lair Davidson (@SincDavidson) September 4, 2024
United States Savings Rate pic.twitter.com/gVHcf1kPVv
— Win Smart, CFA (@WinfieldSmart) September 9, 2024
The net charge-off rate on credit cards [in Q2] was the highest since the third quarter of 2011 pic.twitter.com/c45ZEYN0o9
— Win Smart, CFA (@WinfieldSmart) September 9, 2024
www.fdic.gov/news/speeches/2024/fdic-quarterly-banking-profile-first-quarter-2024
www.bea.gov/news/2024/gross-domestic-product-second-quarter-2024-advance-estimate
apps.bea.gov/scb/issues/2024/08-august/0824-gdp-economy.htm