Over the last year, I’ve heard these stories from friends or friends of friends.  In other words, more people are falling behind in their debt service.  Let’s check this from the Wall Street Journal:

On top of soaring prices for groceries and just about everything else, people have been dealing with higher interest rates on their credit cards. The average rate as of May was 21.51%, according to Fed data, up from around 15% in 2019.

That helps explain why some are finding it harder to keep up with payments, particularly those who don’t earn so much. Around 9.1% of credit-card balances turned delinquent over the past year, the highest rate in over a decade, according to an August report from the Federal Reserve Bank of New York.

Then there is the matter of car loans:

Ally Financial Chief Financial Officer Russ Hutchinson said late payments and charge-offs on auto loans were higher than expected in July and August. 

Borrowers at Ally, a major auto lender, “have been struggling with the cost of living and now are struggling with an employment picture that’s worse,” Hutchinson said.

Who knew that intense inflation would cause this?

Just this morning, I was listening to a show about buying a car and heard that a typical car payment is $750.  How do people pay that?  Well, I guess they can’t, as the lenders are figuring out.

I gotta tell you that I’m feeling OK.  Our Altima is paid for, and my 2005 Focus just hit 200,000 miles.  By the way, I plan to hold on to that one and give it to my grandson when he graduates from high school in 2038.  It doesn’t have a fancy sound system, but he’ll get to baseball practice.

I don’t know how much this issue is being reported.  We should hear about it the next time the candidates get questions.  I hope that V.P. Harris does not tell us she is planning to give new buyers $5,000 to buy a car.

In the meantime, the bills are mounting up in what they call Bidenomics.

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Image: Gage Skidmore via Flickr, CC BY-SA 2.0.