Consumer Health Check: Are We OK? How Credit Card Data Could Provide Some Clues

Oleh Admin 25 Jan, 2023 Posting Komentar

Ernst & Young chief economist Gregory Dacko recently said that despite the recovery in sentiment, consumers remain disappointed.

Large purchases are delayed as consumers prefer saving to luxury and discretionary spending. Again, consumers who continue to slip accumulate risky debt and struggle to pay.

J.P. Morgan Chase & Co. (NYSE: JPM), Wells Fargo & Co (NYSE: WFC), Bank of America Corporation (NYSE: BAC), and recent earnings reports from major card issuers have shed light on consumer health. and Citigroup Inc (NYSE:C).

Trending : Trump in 2016 Failed to Get 'Total Impunity' in 2020 Election Case, Judge Found 'Not Guilty'

Must Read : Consumer Health Check: Are We Right? How Credit Card Information Gives Clues

See also: We scan, but do we know what credit card payments we pay?

For example, according to these companies, the average card issuer rate in the US increased by 6.9% compared to last year. That's down from 9.3% in the third quarter, according to Bank of America analysts.

“We attribute the slower growth in the 4th quarter to weak consumer spending in the US amid a challenging macro environment,” he said.

More details on consumer spending will be released later this week by major credit card companies, including:

Mastercard Inc (NYSE: MA ) and Visa Inc (NYSE: V ): When the two companies report quarterly results on January 26, volume growth is expected to be muted, but earnings for the three months ended December 31-11 are up. percent for Mastercard and 9 percent for Visa from 2022. Compared with. “Weak consumer spending is at risk amid a slowdown in the macroeconomic situation,” analysts say. American Express Co. (NYSE: AXP): The credit card company is expected to report earnings before the market opens on Jan. 27. Q4 revenue is expected to be 15% higher than 2022 . (NYSE: COF): The credit card issuer will report fourth-quarter results after the market closes on January 24. As of December, Capital 1's NPL was 1.18 percent. Meanwhile, the lowest AmEx rate was 0.54 percent. Recently, there have been reports that Capital One has laid off more than 1,000 employees. Discover Financial Services (NYSE:DFS): On January 18, the company announced that net interest income reached about $3.07 billion. While it was more than the $3.02 billion expected, it's clear that some Discover customers are not keeping up with their payments. The level of overdue debt on credit cards for a period of more than 30 days amounted to 2.53 percent. This represents an increase of 87 basis points from last year and 42 basis points from the previous quarter (including surcharges). And the ratio of bad loans for the fourth quarter was 2.37%.

Pay the bills

Credit card data is important in measuring consumer activity and determining the health of the US economy.

According to the Federal Reserve Bank of New York, the "real test" is whether borrowers can make credit card payments.

Baca Juga

In November, the Federal Reserve Bank of New York reported that while crime rates had begun to rise, they were "below the economic boom of the decade before the Great Depression and the pandemic."

Bankrate LLC data shows that cardholders (46% in December) are not paying their balances every month.

For borrowers in high-income regions, default rates remain below historical trends, but the New York Fed said watching the trend of these default rates is critical, adding: “Is this just a return to dovish levels? The lockdown and the stimulus economy are drying up. “Will this be a sign of trouble to come?”

Next : Best Penny Stocks

Image via Pixabay.

Sponsorship

Retirement can be a tricky part of life and a financial advisor can help. Finding a qualified financial advisor is not difficult. The free SmartAsset tool connects you with up to three financial advisors in your area, and you can survey your advisor for free to see which one is right for you. If you're ready to find a consultant to help you reach your financial goals, start now.