Credit cards interest rates are at record high, consumer spending is cooling off, and credit card delinquencies seem that have reached its peak. Banks are open and ready to offer loans, but consumers are not showing up and that is a problem for banks. Banks rely on their loan portfolio to grow, but if consumers that have good credit scores are not showing up, banks’ growth is stagnant. This may be due to the amount of debt American families have accumulated in the past 4 years after the pandemic, high inflation, and high interest rates.
Consumers are trying to catch up and not willing to go into more debt. With the Holidays coming up, consumers spending may see an increase, but major retailers like Target is sounding the alarm that this coming Holiday Season may not be quite as jolly. Merchants will need to adapt, find creative ways to lure consumers into their locations like offering payment choices, savings, and other benefits to shop in their stores.
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