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Alarming news concerning our use of credit cards. This is from Goldman Sachs, which keeps a close eye on this type of data.

Americans’ use of credit cards is up more than usual for this time of year. Credit card delinquency is also up – that’s the percentage of cardholders that are behind or delinquent on their payments. And perhaps most concerning is that gap between card balances and credit limits is shrinking significantly, which indicates more Americans are carrying larger balances from month to month.

The Federal Reserve of Boston also issued a recent report on this. They noted families with household incomes less than $50,000 who were delinquent on their credit card payments were, on average, utilizing more than 80% of their available credit. That leaves almost no cushion, and makes it virtually impossible to borrow more should they legitimately need it. 

Not to mention interest rates on revolving credit, like credit cards, are up significantly right now.

So this is definitely a warning sign, especially with holiday spending in full swing. It also serves as an important reminder to set an affordable budget and avoid using credit unless you have the means & ability to pay it off quickly. As it says in Proverbs 22, “the borrower is the slave of the lender.”