While consumer spending in the U.S. is still going strong, non-traditional consumer lending sources, such as finance companies, are scrambling to keep their doors open.
The financial squeeze that started about six months ago for non-bank companies that lend to ordinary Americans is getting worse, contrasting sharply with recent rallies in stocks and corporate bonds. The main reason: These finance companies have lost access to easy money.
Widespread economic uncertainty has made debt investors less willing to buy the bonds these nontraditional lenders issue. Higher interest rates, courtesy of the Federal Reserve, have given investors ...
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Small Businesses Starting to See the Strain of Inflation
Rent delinquency rates among US small businesses increased significantly this month, a new report shows, Bloomberg News reported.
About 37% of small businesses, which between them employ almost half of all Americans working in the private sector, were unable to pay their rent in full in October. This is according to a survey from Boston-based Alignable, a network of 7 million small business members. This is an increase of seven percentage points from last month and is now at the highest pace this year, the survey showed.
The survey of 4,789 small business owners was conducted between Oct. 15 and Oct. 27. The findings partly reflect how ...
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Credit Card Balances Return to Pre-Pandemic Levels
Credit-card debt recently reached a new milestone - it has returned to where it was before the pandemic.
Total card balances in the U.S. hit $916 billion in September, nearly identical to December 2019 levels, according to the credit-reporting firm Equifax Inc. Balances are up 9% from January and about 23% higher than their pandemic low in April 2021.
Card balances fell sharply in the early months of the pandemic after Americans, out of work and stuck at home, cut back on spending. Stimulus checks later padded savings accounts and allowed many to pay down costly debt.
When the economy reopened and people went back to work, ...
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Inflation is Depleting Emergency Funds
Inflation is taking its toll on American's emergency funds.
The share of workers who say they are living paycheck-to-paycheck has surged among middle- to high-income earners — 63% and 49%, respectively — up from 57% and 38%, respectively, a year ago, according to a survey of almost 4,000 workers released this week by online loan specialist LendingTree. Overall, 65% percent of employed consumers were living paycheck-to-paycheck in September 2022 — up from 60% a year ago.
Millions of Americans face rising prices on essential goods and services such as food and rent as their savings are drying up after a post-pandemic spending splurge. ...
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Seniors Are Falling Further Behind – A Warning For Future Generations
Recent surveys are showing that while overall poverty rates in the United States are falling, they are rising for Americans over age 65.
According to the latest U.S. Census Bureau data, the share of older people (over 65) living below the poverty line rose to 10.3% in 2021, up from 8.9% in 2020. The increase means that an additional 1 million older adults have fallen below the poverty threshold, bringing the total number of seniors in that unfortunate category to nearly 6 million, according to an analysis by the National Council on Aging (NCOA).
Another organization, The Senior Citizens League, a Washington-based advocacy group, ...
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Minimum Wage Workers Cannot Afford to Live Alone
In many major U.S. cities, minimum wage workers need to clock in over 50 hours each week just to be able to afford rent on a one-bedroom home, a recent survey conducted by United Way of the National Capital Area found.
In New York City, minimum wage earners would need to work 111 hours to afford to rent a one-bedroom.
United Way used data from the National Low Income Housing Coalition to calculate the number of hours a minimum wage worker would need to put in each week in order to afford rent in the 50 biggest U.S. cities.
There are only two cities on the list where a worker earning minimum wage can afford to work less than 50 hours ...
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Money Issues Having an Impact on Mental Health
October 10th was World Mental Health Day, and the 2022 World Mental Health Day theme was, “Make mental health and wellbeing for all a global priority.”
Finances are a huge stressor for many, and if you want to make mental health a priority, alleviating some of the anxiety surrounding money management is a good place to start.
42% of US adults say money is negatively impacting their mental health, according to a recent survey from Bankrate and Psych Central. The survey polled 2,457 adults about how finances affect their mental state. Feeling stressed is the top response to finances, according to 70% of survey respondents.
Other ...
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Record Consumer Debt Not Affected by Higher Interest Rates
American consumers are now more indebted than ever. A recently released Federal Reserve Consumer Credit report shows that U.S. consumer credit outstanding has reached historic levels as outstanding consumer credit is now at $4.7 trillion. In August, consumer credit increased at a seasonally adjusted annual rate of 8.3 percent. The previous rise in July had been 6.%.
These current levels of consumer debt show that the Federal Reserve raising rates has not slowed down consumer borrowing. While consumer credit declined in the years immediately after the 2007 – 2009 financial crisis, since the second quarter of 2011 until the second quarter of ...
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NYC Taxi Bailout Plan May Provide a Bonus to the IRS
As an attorney who has had his finger on the pulse of the taxi industry since the crisis began in early 2016, I am compelled to comment when I think that an injustice is occurring
Although, on the surface, the NYC restructuring program with Marblegate/Depalma/Fieldpoint that formally rolled out on September 19, 2022 looks promising on the surface, an issue that had held the rollout back until now has not been adequately addressed - namely the tax consequence of the loan reduction.
Since this issue has not been adequately resolved, it has been buried in a general disclosure and disclaimer that most taxi owners may be missing since their ...
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Car Prices Are Surging and Affordability is Decreasing
The purchaser of a new car financed an average of $40,290.00 during the second quarter of 2022, according to credit monitoring company Experian - an increase of 13.2% over the last year’s figure. The price of the average new car has also soared over the past year to $48,182.00 in July, 2022 compared with $42,736 in July 2021.
Overall, incomes have not kept pace with these increases, which have left many working longer than ever to pay off their new cars over ever-increasing terms. As of July, 2022, the average wage earner would need to work 42.2 weeks to pay off the average new car. In addition, the average borrower is now committing to ...
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