Posted on 10/11/2025 8:26:08 AM PDT by Diana in Wisconsin
The alarms aren’t just blinking anymore. They’re blaring. America’s debt-fueled consumer economy is starting to crack. Families who used to keep the stores and car dealers busy are now falling behind on payments. This isn’t some slow leak. It looks and feels like the early days of 2008, only deeper and faster. Car loans are a disaster. Credit cards are choking people. Home loans are sliding into trouble. Even those Buy Now Pay Later apps, sold as a way to “manage money,” are pulling people into digital debt traps. The question isn’t if the hit is coming. It’s how long the people in charge can pretend it isn’t happening.
Auto loan debt just blew past $1.66 trillion. The Consumer Federation of America says defaults, delinquencies and repossessions are “approaching levels not seen since just before the Great Recession.” https://www.carscoops.com/2025/09/auto-loan-delinquencies-are-off-the-dial-and-even-prime-borrowers-are-struggling/
“Auto finance is at a breaking point… Subprime delinquency is worse than in the 2008 financial crisis.”
Even good-credit borrowers are slipping. Cox Automotive says people with above-average scores are now twice as likely to miss payments as before the pandemic. Repossession rates jumped 43% from 2022 to 2024. One in four trade-ins is now underwater.
Credit card debt is on the same path. The New York Fed says balances hit $1.21 trillion in Q2 2025. https://www.cnbc.com/2025/08/05/ny-fed-credit-card-debt-second-quarter-2025.html
“We are still seeing elevated delinquency rates for credit cards,” with 6.93% moving into delinquency over the last year.
The St. Louis Fed backs it up with a 3.05% delinquency rate across all commercial banks. https://fred.stlouisfed.org/series/DRCCLACBS
Continues at link.
When Biden stole the election in 2020 we paid off all our debt except our mortgage and put everything into real estate and precious metals. We keep almost no cash in the bank. Now 5 years later that decision is really paying off.
“That’s insanity. I have never financed a car for more than 30 days or so...”
I got a big car loan once because the dealer offered a decent discount on the price to “sucker” me in. I knew the guy, he wasn’t happy when I used my home credit line to pay it off a couple of weeks later. Then I paid off the home credit line as quickly as possible and got to write off the interest in the meantime since it was on real estate instead of a car.
“Now 5 years later that decision is really paying off.”
And it will keep paying off, way to go! Few people can look ahead 5 years, let alone 10 and 20. I bought a piece of land in 1984, sold it in 2016 and carried the mortgage, which was paid off 5 years later. Now that was a hold.
I think me and the Mrs. are going to try to do something similar. We make very good money now in Alaska, but absolutely don’t want to retire here. I honestly don’t know why the in-laws and many other older people do it. My wife grew up here. We’ve been here for about 25 years. Summers and the scenery is gorgeous, but it’s cold and dork for far too long. Additionally, Alaska is turning blue.
Alas for the dealers and all, I'm driving my dear old diesel truck, nicely maintained, and the Mrs. is driving her older Honda sedan, also regularly maintained. We can't "do" la-di-dah. We also don't give a cr*p about "doing" la-di-dah.
"Strong and sexy" is having no debt and plenty of cushion. Feels good!
Hey, hey, there are plenty of over-priced vehicles on the road, like pretty much all of them. Why are you picking on the fine automobiles from Bavaria? I have one in the garage, purchased at the factory in Munich when they used to let you do that. No, I don’t feel strong and sexy driving it. I just appreciatee the way it looks, accelerates and stops on a dime. Don’t worry. I paid cash.
No argument from me. For two well older than us in our extended circle, when they found things a little tough, we bought out their remaining mortgages with proper docs enrolled with the local counties, and they pay zero excepting property taxes. We took a stake as percentage of the valuation at the time of the docs, and so our estate will be repaid when the property sells. Until then, it's just an asset "waiting." And our extended clan is less stressed.
yup
That’s a great strategy. My last home sale was to a Realtor friend who had said for years, “If you ever sell, I want your house.” I kidded him when ready to sell: “Give me 50% down and I’ll carry you at below the market rate.” He did and has been paying interest only for 5 years. I kid him, “I hope you don’t pay me, I’d love to have that house back cheap.”
They can always walk.
Can you disclose what state you are in?
$250 for property tax is incredibly low. That’s what funds public schools. You must be in an Indian reservation or somewhere remote like Alaska.
Welcome to the consequences of Usury.
The major banks of the world have purchased our legislators and as a consequence usury has become the normal day to day business model of the world.
Interest rates on credit cards can be as high as 34%.
Home equity loan rates are running from 7 to 9 percent while inflation runs at about 3% and interest on a saving account runs around 1%. And fees on managing your account are likely to consume your interest and more.
Banks get free use of our money and we pay them for giving us access to it.
Usury laws are a thing of the past and we pay the price for that.
Sorry, this guy sounds is a flipping stooge. reminds of the other negative nelly ex-con that another freeper constantly posts as an authority, despite none of his predictions being accurate
Using debt to acquire things that appreciate can be very good (homes, rentals, raw land). Debt on things that depreciate, very bad.
There are no guarantees....................
My beater died. I don’t notice any downward pressure on prices nor do I see any downward pressure on interest. Plus the dealers add two grand if you don’t finance thru them. Plus no cash discount.
Kentucky. The comical part is that it was around $450 when we moved here. We even added a new, insulated 30x60 mancave/shop building.🤣
The county went wet a few years ago and I think that’s part of the reason for the lower property tax. Their liquor tax is pretty steep. Almost as bad as Seattle 0 so we get ours at Costco in Louisville. Except we don’t drink any more.
“Curious as to how our FReepers are handling household financial aspects these days...”
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The day after DJT was elected for his first term, I purchased a S&W Victory handgun, an impulse purchase. At that time we were impulse purchase junkies, living paycheck to paycheck. The next year, 2017 we went all in and paid off our mortgage a 15 year note paid off in 12 years. Still had lots of consumer debt though. 4 months after paying off our home we got serious and took steps to pay off all of our debt. It was difficult and demoralizing but so happy we did this.
Today things are much different with us. We purchased a 2022 Subaru in May paid cash. 2025 will be the second year I fully max out my 401K after coming close in 2023. We have a brokerage account, ROTH IRAs, a HYSA, a rollover IRA, a 403B and a metals stack. We figure out how much we want to save and invest per month and spend the rest of living expenses. It’s a 50+% savings rate for us. Life is good.
“Small, but new...” is exactly what we did.😁
BTW, one thing that helped us was that I spent most of my working life in IT in Seattle, a Tier 1 market. So the pay was good. And a few years I even paid the maximum SS tax because I was a contractor. i.e. some of it was not taxed at all.
So I get a fairly substantial SS income, but I live in a very low cost of living part of the US (Rural Kentucky).
I see the US as 50 separate, mostly sovereign countries. And they all exist under the same federal rules, but vary wildly in income and cost of living levels. So I moved from an expensive, rich one, to a cheap, but relatively poor one. It’s almost like ex-patriating, without actually ex-patriating.
Central kentucky. Also, I’m in the county. Also, the county just went wet. So our property taxes actually went DOWN from around $450 a few years ago.
Comically, they repave the roads here more than they need to, as far as I’m concerned. But it makes them a blast to drive on. It’s a motorcyclist’s paradise.
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