Interest payments for U.S. consumers are through the roof. Last quarter, consumers spent a record-high $1.1 trillion on interest payments alone, reported Quartz, using data from the U.S. Bureau of Economic Analysis (BEA).
Over half of those interest payments were not related to mortgage debt. Mortgages often have some of the highest interest over the life of the loans.
The “personal interest payments” line of BEA’s report shows that $563.2 billion of the $1.1 trillion was non-mortgage related interest.
“The dominance of the 15-30-year fixed-rate mortgage has played a significant role in blunting the impact of higher rates on aggregate household debt service,” head of U.S. regional economics at the credit rating agency Fitch, said.
“However, the sharp increase in credit card rates and the resumption of student loan payments will drive non-mortgage household debt service to historic highs in 2024.”
Credit cards have some of the highest interest rates outside of payday loans, with the average interest rate sitting at 22.8% as of 2023.
Read full story at Fox Business.
