US debt crisis deepens: Families now owe a record $18.6 trillion as credit cards, mortgages hit all-time highs

U.S. household debt has jumped to a record $18.59 trillion. The bulk of household debts are due to mortgage debt, credit card debt, student loans, auto loans, as per a report. In the last 12 months, the household debt has gone up by more than $642 billion, including $197 billion the third quarter.

The mortgage debt has gone up by over $137 billion to record $13.07 trillion. Credit card debt jumped by $24 billion to all-time high of $1.23 trillion, as per data reported by The Kobeissi Letter.

Students loan rose by $15 billion to a record $1.65 trillion. Auto loans went up by $11 billion to $1.66 trillion, according to the report.




The U.S. Federal Reserve cut its key interest-rate target by a quarter of a percentage point last month.

With the most recent rate cut, credit card users will save roughly $1.92 billion in interest over the next 12 months, according to WalletHub data. It typically takes one to two billing cycles to see a rate cut reflected on your credit card statement.

Rates on new credit card offers are still high – they stand at 24.19 per cent, down from 24.92 per cent at the start of the year, according to Matt Schulz, chief consumer finance analyst at LendingTree. “They are only going to fall more between now and the end of year, regardless of what the Fed does in December,” Schulz said.

Mortgage rates, which are tied to the 10-year U.S. Treasury note, dropped by nearly three-quarters of a percentage point this year, which is good news for borrowers. The average rate on a 30-year fixed mortgage fell to 6.26 per cent during the week ending October 22, well below the 7.19 per cent high reached in mid-January, according to Bankrate.

FAQs

Q1. When will U.S Fed meet for interest rate decision?
A1. U.S. Federal Reserve will meet in December.

Q2. How much rate cut was announced by U.S. Fed?
A2. The U.S. Federal Reserve cut its key interest-rate target by a quarter of a percentage point last month.