How to Defuse Exploding Consumer Credit Debt
The average household had a credit card balance of $7,177 in the first quarter, the highest level in six years, according to a new report by CardHub.
Total consumer credit card debt in the U.S. amounted to more than $57 billion for the quarter, despite paying off $34.7 billion in the quarter.
There was some good news in the report: Credit card defaults for the quarter declined more than $350 million to the lowest rate since 1995, and first quarter debt reduction was 7 percent large than those of the past two years.
About a third of households with credit card debt carries a balance from month to month claims a separate study by the National Foundation for Credit Counseling.
Meanwhile, the number of credit card accounts is increasing. In the first quarter, TransUnion says there were 359.64 million credit card accounts, up 4 percent from the first quarter of 2014.
CardHub estimates that net credit card debt for the year will be $55.8 billion, roughly the same level as last year.
Consumers with high levels of credit card debt could benefit from taking advantage of some of credit card transfers, which are among the sweetest they’ve been in years, with many issuers offering zero-percent transfers for a year or more.
Look for a deal that includes no transfer fees or annual fees. Rolling over debt only makes sense if you can pay it off before or immediately after the introductory rate expires.
Budget ‘Chaos’ Threatens Army Reset: Retired General
One thing is standing in the way of a major ongoing effort to reset the U.S. Army, writes Carter Ham, a retired four-star general who’s now president and CEO of the Association of the U.S. Army, at Defense One. “The problem is the Washington, D.C., budget quagmire.”
The issue is more than just a matter of funding levels. “What hurts more is the erratic, unreliable and downright harmful federal budget process,” which has forced the Army to plan based on stopgap “continuing resolutions” instead of approved budgets for nine straight fiscal years. “A slowdown in combat-related training, production delays in new weapons, and a postponement of increases in Army troop levels are among the immediate impacts of operating under this ill-named continuing resolution. It’s not continuous and it certainly doesn’t display resolve.”
Pentagon Pushes for Faster F-35 Cost Cuts
The Pentagon has taken over cost-cutting efforts for the F-35 program, which has been plagued by years of cost overruns, production delays and technical problems. The Defense Department rejected a cost-saving plan proposed by contractors including principal manufacturer Lockheed Martin as being too slow to produce substantial savings. Instead, it gave Lockheed a $60 million contract “to pursue further efficiency measures, with more oversight of how the money was spent,” The Wall Street Journal’s Doug Cameron reports. F-35 program leaders “say they want more of the cost-saving effort directed at smaller suppliers that haven’t been pressured enough.” The Pentagon plans to cut the price of the F-35A model used by the Air Force from a recent $94.6 million each to around $80 million by 2020. Overall, the price of developing the F-35 has climbed above $400 billion, with the total program cost now projected at $1.53 trillion. (Wall Street Journal, CNBC)
Chart of the Day - October 6, 2017
Financial performance for insurers in the individual Obamacare markets is improving, driven by higher premiums and slower growth in claims. This suggests that the market is stabilizing. (Kaiser Family Foundation)
Quote of the Day - October 5, 2017
"The train's left the station, and if you're a budget hawk, you were left at the station." -- Rep. Mark Sanford, R-S.C.