U.S. Credit Card Debt Approaching $1 Trillion. Will Subprime Auto Loans Be the Next To Blow?
March 15, 2016 (EIRNS)—Total credit card debt in the United States is approaching a trillion dollars. Americans accumulated more new credit card debt during just the fourth quarter of 2015 than they did during the all of the years of 2009, 2010, and 2011 combined.
EconommicCollapseBlog reports that last year, credit card debt in the U.S. surged by approximately $71 billion to $917.7 billion, according to a new study from CardHub.com. The research also found that most of the debt accrued in 2015 came in the fourth quarter, when Americans tacked on more than $52 billion.
In a not unrelated matter, Fitch Ratings service said in an end-of-February press release that delinquencies on subprime auto asset-backed securities (ABS) have reached levels not seen since 2009. Fitch cited data which showed that delinquencies of 60 days or longer hit 4.98% in the first month of 2016—the highest level since September 2009, up 6% from December, and 4.8% higher than the same period in 2015.
Gary Kaltbaum of Kaltbaum Capital Mangement told Fox Business Network yesterday that automobile leasing last month was the highest ever. In efforts to keep their numbers up, auto companies have increased incentives to potential buyers and leasers, and have lowered their standards on lending. Kaltbaum said the losses are likely to hit the bond holders the hardest.
“If we get a bad economic scenario, I think all heck can break loose, because lenders have gone too far trying to get people in who should not get the products they’re buying",