It might not come as a surprise that the global financial crisis and the bursting of the credit bubble are still hurting Americans. But there’s nothing like seeing the actual data. New numbers released by the Federal Reserve this week show that the number of people who are delinquent on debt payments is much higher today than in the “pre-crisis” era.
Intuitively, we know that if you’re more than 30 days behind on credit card payments, mortgage payments, and other types of debt payments, then you are more at risk of being overwhelmed by your debt. And financial institutions likewise have greater risk with customers who are more than 30 days late. So if the number of those late customers has increased it’s worrisome for both the credit industry and for the public, right?
Unfortunately, that’s exactly what has happened.
The data from the Federal Reserve show a striking increase over the last three years, not only in the number of people who are more than 30 days late, but also in ones who are severely late (by more than 120 days).
What’s even more scary is that rather than bouncing back to “pre-crisis” levels, these numbers appear to be reaching a new plateau:
In the graph above, you can see that the two sections which have grown the most since 2008 are the orange and red ones, representing people who are more than 120 days late. The data show that there was not much improvement compared to the previous quarter.
What this means is there’s a huge need for new innovations that will help people who are struggling with their debt.
That’s the reason we created ReadyForZero, and that’s the reason we are so focused on making the best possible tool for helping people easily manage their debt. We want you to be able to customize your own plan and track your progress at a glance. And of course, we motivate you by giving you reachable goals — such as paying off 25% of your first account.