It’s hard out there right now, and who knows if or when anything will actually get any better. Inflation and a looming recession are putting many people in dire straits. In order to cope with rising costs of living, consumers are taking out unsecured loans and relying on lines of credit.
According to a report by the credit rating firm TransUnion, card balances reached a record high of $866 billion in the third quarter. This was driven primarily by the combination of Gen Z and millennial swipe gawds, as well as the crumbling state of the economy. Delinquencies were at about the same pace they were before the pandemic but have since risen in comparison to last year’s levels.
We are living in very precarious times. Reports say wages are slightly better than they were last year and that job creation is strong, but that doesn’t tell the full story. While some sectors are experiencing growth, others are undergoing waves of uncertainty, especially in tech and journalism. Journalism has been shouldered with extreme job loss for over a decade, but the tech industry’s cuts in staff should be cause for alarm. Wages may be better than they were in 2021, but if people weren’t getting paid enough last year, increases don’t matter all that much when the cost of living is rising faster than paychecks. Unemployment has risen slightly from 3.5 to 3.7 percent. However, the way unemployment is calculated is faulty. It doesn’t take into account part-time employees, low-paying jobs, or any other undervalued workers. It isn’t a clear indicator of how well the economy is doing.
When it’s all said and done, despite consumers being placed in a position where they have to stretch their dollars further and further, businesses are passing a larger and larger share onto consumers. They’re even bragging about it.