Scary Debt Insights for Halloween

Written by Di Princell

October 28, 2021

Which is the true nightmare, the horrific dream that you have in your sleep or the dissatisfied reality that awaits you when you awake ~ Justin Alcala

Like many life-altering issues in our country, we are keen on understanding, but unfortunately, laissez-faire on action. How many times has our country raised the debt ceiling avoiding a government shut-down rather than resolving the debt problem? The Federal Reserve Bank of New York’s Center for Microeconomic Data reports that in August 2021, the U.S. Public Debt was 28.23 trillion dollars, 1.7 trillion higher than last year, more than quadrupling since 2000. Yikes!

The Report also revealed that household debt (consumer debt) increased by $313 billion, an uptick to almost $15 trillion in 2021. Mortgage balances, credit card balances, auto loans, all components of household debt significantly increased excluding student loans which actually dropped. Installment credit hit new highs for mortgages and auto loans, and the hole keeps getting deeper.

A scary fact for Halloween in Kim Porter’s article, Average American Debt, “as of September 2021, the average American debt among consumers is $92,727. The overall debt figure includes credit card balances, student loans, mortgages and more.” Sadly, that’s not going away after Halloween, and most assuredly will frighten next year’s revelers with an even bigger number.

The Buy Now Pay Later model (BNPL) may be another conduit for raising consumer debt unless an effective credit approval model is utilized at the point-of-sale. This is a no-holds-bar “must” for all merchants and lenders. Ron Shevlin’s article, BNPL:The New Payment Trend Generating $100 Billion in Sales, reports that “the Gen Zers have raised their BNPL usage from 6% in 2019 to an astounding 36% this year. Millennials are up to 41%, more than doubling since 2019”, and the beat goes on. And now for the big Halloween scare by Shevlin – “Among BNPL users, 31% consider their financial health to be “dire” or “struggling” (versus “managing” and “thriving”). In contrast, of consumers who don’t use BNPL services, just 20% rate their financial health as dire or struggling.” BOO!, a ground breaking predictive analytics company, is keenly aware of the relentless growth of consumer debt in the U.S., and believes that the upfront, approval process must be managed with the most advanced financial analytics in the industry, one that measures relevant consumer behavior. RIBBIT’s BankINSIGHTS suite of services provides bank analytics for instant credit decisioning, account onboarding, and payments from a single API connection. The company’s combined products are designed to simplify financial decisioning without the need for multiple providers, an easy solution for lenders

The myopic examination of a consumer’s financial footprint is no longer acceptable. Refusing and approving loans using inaccurate data is not fair to either group of borrowers. Let’s reform America’s consumer debt problem through a transformative approval process developed by RIBBIT’s superior data scientists and their powerful, deep-dive analytics. Guaranteed to spook all competitors!

Stay tuned . . .

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