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4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by John Nelson, financial planner at NelsonCorp Wealth Management. Welcome back, John.
John Nelson:
Oh, thanks for having me, Brandy.
Brandy Auterson-Hurst:
So credit card debt has been climbing in recent years. Is this a red flag for the U.S. economy?
John Nelson:
Yeah, that’s a great question. It can be. It’s one of thousands of indicators we look at. It’s one we follow very carefully. It could be viewed in one way as consumer confidence that people feel that they’re in a position to manage that debt, even though they may be taking that on. The other side of that is the financial strain where you know, not in a position to purchase something and it’s going on the card. So it’s definitely an area of focus.
And the graphic I have with me here today just shows how well are people managing that. This is the delinquency rates, and what we see here is we’re pretty much at historical averages. We peak, you can see in ’08, ’09, the financial crisis, 2020, 2021 was historical lows. That was coming after a lot of the COVID relief money was sent out to both businesses and individuals. So today we’ve seen a little bit of a rise here recently, but it still appears from many indicators that it’s still at a very manageable level.
Brandy Auterson-Hurst:
Okay, so what does this stabilization mean for the overall economy?
John Nelson:
Yeah, I think it’s a positive, broadly speaking. Even in the face of higher interest rates today, higher inflation of what we’ve seen over the last couple of years, that if it continues to grow, that becomes a more concerning point. Or if we see those delinquency rates pick up, definitely a concerning point. But the current levels and where things stand, it appears to be very manageable, and broadly speaking, good news for the overall economy.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on our QuadCities.com.
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Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.