Markus Andrews

Collectively, Americans owe a record $1.17 trillion on their credit cards, according to a new report from the Federal Reserve Bank of New York.
Still, credit card delinquency rates improved in the most recent quarter, suggesting that “rising debt burdens remain manageable,” the New York Fed researchers said.

Collectively, Americans now owe a record $1.17 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
Credit card balances rose by $24 billion in the third quarter of 2024 and are 8.1% higher than a year ago.

Despite that increase, credit card delinquency rates improved — with 8.8% of balances transitioning to delinquency over the last year, compared with 9.1% in the previous quarter, the New York Fed found. That change could “suggest that rising debt burdens remain manageable,” the New York Fed researchers said on a press call Wednesday.
“Overall, balance sheets look pretty good for households,” the researchers added.

Credit card debt has remained stable over the last two decades; however, in the years since the pandemic, households largely spent down their excess savings, which sparked a rebound in credit card balances. Consumer spending continues to remain strong, despite high borrowing costs.
But now, growth in credit card balances has slowed, a separate quarterly credit industry insights report from TransUnion also found.
The average balance per consumer stands at $6,329, rising only 4.8% year over year — compared with an 11.2% increase the year before and 12.4% the year before that, TransUnion found.

More from Personal Finance:28% of credit card users are paying off last year’s holiday debtHoliday shoppers plan to spend more while taking on debt2 in 5 cardholders have maxed out a credit card or come close
In the last three months, 42% of Americans said their total debt hasn’t changed, while 28% of have seen their debt rise, according to another survey by Achieve, which helps consumers manage debt.
Of the latter group, most said the increase was due to the ongoing difficulty of making ends meet. Others cited general overspending and a lost job or reduced wages. Achieve polled 2,000 adults with one or more kinds of consumer debt in October.
“Across the board, unemployment is low and wages have risen, but those macroeconomic conditions aren’t felt equally across the population, especially for consumers who live in areas where the impact of inflation is the greatest,” Brad Stroh, Achieve’s co-founder and co-CEO, said in a statement. 

Credit card rates still top 20%

Meanwhile, credit cards have become one of the most expensive ways to borrow money.
Lower-income households, who had to stretch to cover price increases, have been hit especially hard after the Federal Reserve’s string of 11 interest rate hikes lifted the average credit card rate to more than 20% — near an all-time high.
Even as the Fed lowers its benchmark, the average credit card rate has barely budged.
For those with variable rate debt, such as credit cards, “it’s obviously going to help if rates come down,” the New York Fed researchers said.
However, “the borrowing amount is more important than the interest rate,” they added.

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The consumer price index rose by 2.6% in October 2024 versus a year earlier, the Bureau of Labor Statistics said. That’s up from 2.4% in September.
Gasoline prices declined and grocery inflation remains low. But CPI housing inflation remains stubbornly high. Other categories, such as auto insurance, remain elevated.
Some of President-elect Donald Trump’s policies are likely to be inflationary, if enacted, economists said.

A customer walks by a display of fresh eggs at a grocery store on Sept. 25, 2024 in San Anselmo, California.
Justin Sullivan | Getty Images

Progress in the fight to tame pandemic-era inflation appears to have stalled out in October, despite lower prices at the gasoline pump and a moderation in other consumer staples such as groceries.
Meanwhile, economists think policies such as import tariffs floated by President-elect Donald Trump would likely — if enacted — exacerbate the inflation rate, which hasn’t yet declined to policymakers’ long-term target.

The consumer price index, a key inflation gauge, was up 2.6% in October versus a year ago — an increase from 2.4% in September, the Bureau of Labor Statistics reported Wednesday. The reading was in line with economists’ expectations.

While that October uptick may seem like a setback, consumers can take solace that broad price pressures are continuing to ease, economists and policymakers said.
Federal Reserve Chair Jerome Powell on Thursday said economic data points to inflation “continuing to come down on a bumpy path.”
“One or two really good data months or bad data months aren’t going to really change the pattern at this point,” Powell said during a press conference.

Stephen Brown, deputy chief North American economist at Capital Economics, echoed that sentiment: “The overall [inflation] trend is positive,” he said.

In fact, the pickup in the annual inflation rate is at least partly due to a statistical quirk: The monthly inflation rate in October 2023 was unusually low, making the October 2024 reading look relatively high by comparison, economists said.   

‘Lagged impacts’ create trouble spots

Inflation has pulled back significantly from its pandemic-era peak of 9.1% in June 2022.
However, there are still some trouble spots.
Auto insurance prices, for example, are up 14% since October 2023, according to CPI data.
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Vehicle insurance premiums face “upward pressure” largely due to a lag effect from earlier inflationary dynamics, Brown said.
For example, new and used vehicle prices began to surge in 2021 amid a shortage of semiconductor chips used to manufacture cars; because of that sticker shock, insurers’ cost to replace vehicles after a car accident is much higher, Brown said. Insurers also typically need approval from regulators to raise consumer premiums, a process that takes time, he said.
“Lagged impacts” are affecting other categories, too, making for overall slow progress on reining in inflation, Brown said.

Housing is the ‘major impediment’

Homes in Discovery Bay, California.
David Paul Morri | Bloomberg | Getty Images

Housing, the largest CPI category, is a key example of that lag.
Shelter inflation has throttled back painfully slowly, even as inflation in the national rental market has declined considerably, economists said.
“Market rents, newly signed leases, are experiencing very low inflation,” Powell said during the press conference.
Shelter inflation has taken a long time to adjust to that housing backdrop due to how federal statisticians compile the CPI index. In short, its slow adjustment up or down is by design.
“So that’s just a catch-up problem,” Powell said. “It’s not really reflecting current inflationary pressures.”
CPI shelter inflation heated up on a monthly basis in October, rising to 0.4% from 0.2% in September. Its annual inflation rate has declined to less than 5% from a peak of more than 8% in early 2023.
Shelter is “the continued major impediment to getting inflation all the way back,” said Mark Zandi, chief economist at Moody’s.
The Federal Reserve has a long-term annual inflation target of around 2%.

Where consumers saw some relief in October

Brandon Bell | Getty Images News | Getty Images

Consumers saw some relief at the grocery store and at the gas pump in October.
Inflation for groceries cooled on a monthly basis, to 0.1% from September to October, down from 0.4% the prior month. Grocery prices are up about 1% since October 2023.
They’re “very, very tame,” Zandi said.
That’s despite various supply-and-demand idiosyncrasies that are raising prices for certain food items, he said. For example, avian flu, which is lethal for chickens and other birds, has negatively affected egg supply and led prices to swell 30% in the past year; similarly, a poor orange crop has pushed up orange prices 7% annually.
The price for a gallon of gasoline fell 1% during the month, according to CPI data. Prices are down more than 12% in the past year.
“Gasoline prices are way down,” Zandi said. Average prices could fall further, to below $3 a gallon, he said. They were at $3.05 a gallon, on average, as of Nov. 11, according to the U.S. Energy Information Administration.
“We could get more relief there because global oil prices are soft,” Zandi said.
That weakness may be in anticipation of President-elect Donald Trump’s proposed policies around China, said Zandi. Those may include tariffs of at least 60% on goods imported from China, which has a huge appetite for oil. If Trump’s policies were to negatively affect the Chinese economy, they’d also likely dampen China’s oil demand.

Trump policies thought to be inflationary

Trump has proposed broader tariffs, of perhaps 10% or 20% on all goods imported to the U.S. Additionally, he has announced plans to deport millions of undocumented immigrants and enact a package of tax cuts.
If put in place, such policies would likely stoke U.S. inflation, economists said.
“While we believe that inflation remains on a disinflationary trajectory, we now see the risks as clearly tilted to the upside,” Bank of America economists wrote in a note Monday. “These risks stem from potential policy changes rather than economic fundamentals.”
Placing an import tax on goods would likely lead U.S. companies to raise prices for those goods, for example, economists said. Fewer immigrants in the labor pool may push businesses to raise wages to attract applicants and retain workers, while tax cuts could put more money in consumers’ pockets and boost their spending.

“Indeed, we see pro-growth fiscal policy, tariffs, and tighter immigration as potential sources of upside inflation risk over the coming years if they are implemented,” Bank of America economists wrote.
The annual inflation would likely be around 2.1% by the end of 2025 absent Trump’s policies, said Brown of Capital Economics. If enacted, that figure would likely be around 3%, he said, as a “ballpark estimate.”
“The return of inflation to the 2% target may prove short-lived,” Brown wrote in a research note Wednesday.
However, much depends on how, when and if those policies are enacted, economists said. More

The Education Department said the full launch of the 2025-26 FAFSA is on track for December 1.
Here are a few steps you can take now to prepare.
For many families, financial aid is crucial when it comes to covering the cost of college.

The Free Application for Federal Student Aid for 2025-26 will be available for all students and contributors on or before Dec. 1, the Education Department says.
Typically, students have access to the coming academic year’s form in October, but this year’s delayed release follows a “phased rollout” meant to address reported issues from the 2024-25 FAFSA cycle. Last year’s new, simplified form was plagued with problems at the outset, some of which are still outstanding.

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Although the extended testing period for the 2025-26 FAFSA is important, another delayed start “creates a compressed timeline for students and families to submit their financial information, which can lead to missed opportunities for aid,” Beth Maglione, interim president and CEO of the National Association of Student Financial Aid Administrators, said in a statement.

How to prepare for the 2025-26 FAFSA

“I would encourage families to start gathering their financial documents and information now, so they’re ready to apply as soon as the application becomes available,” Maglione said. “Taking these steps early will help ensure they don’t miss out on vital financial support for college.”
According to Maglione, there are five key moves that students and parents can make now to prepare for their application as soon as it becomes available. Here is her best advice:

Set up a studentaid.gov account: Before the new form opens, students and their parents (if the student is a dependent) can set up a username and password, commonly called the FSA ID, to access and complete the FAFSA electronically. 
Gather personal information: Students should have their Social Security number on hand (as should parents, if the student is a dependent, or student spouses, if applicable). However, if a student spouse, parent or stepparent does not have an SSN, they can still register for an FSA ID. The form may also ask for your driver’s license or state identification number. Non-citizens should have their Alien Registration number handy.
Federal tax information: Applicants will need tax information from the prior-prior tax year. In this case, that means students should have 2023 tax returns for the 2025-26 FAFSA.
Financial records: The FAFSA requires records of the student’s (and the parents’, if applicable) bank accounts, stocks, bonds, real estate (not including the family home) and other investments. Any records of untaxed income, such as child support or government benefits, should be documented as well.
List of schools: Finally, FAFSA applicants should have a list of schools the student is applying to or attending, which will need to be listed on the FAFSA application.

Why the FAFSA is so important

For many students, financial aid is crucial when it comes to covering the cost of college.

Higher education already costs more than most families can afford, and college costs are still rising. Tuition and fees plus room and board for a four-year private college averaged $58,600 in the 2024-25 school year, up from $56,390 a year earlier. At four-year, in-state public colleges, it was $24,920, up from $24,080, the College Board found.

The FAFSA serves as the gateway to all federal aid money, including federal student loans, work-study and especially grants — which have become the most crucial kind of assistance because they typically do not need to be repaid.
Submitting a FAFSA is also one of the best predictors of whether a high school senior will go on to college, according to the National College Attainment Network. Seniors who complete the FAFSA are 84% more likely to enroll in college directly after high school, according to an NCAN study of 2013 data. 

How FAFSA failures have impacted students

After last year’s FAFSA complications, it became clear how much financial aid weighed heavily on decisions about college. 
In part because of issues with the new form, the number of new first-year college students sank 5% this fall compared with last year, according to an analysis of early data by the National Student Clearinghouse Research Center.
The declines in first-year student enrollment were most significant at four-year colleges that serve low-income students, the report also found.
At four-year colleges where large shares of students receive Pell Grants, first-year student enrollment dropped more than 10%.
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Traders work on the New York Stock Exchange floor on November 12, 2024 in New York City.
Source: NYSE

Stocks @ Night is a daily newsletter delivered after hours, giving you a first look at tomorrow and last look at today. Sign up for free to receive it directly in your inbox.
Here’s what CNBC TV’s producers were watching during Tuesday’s modest market decline and what’s on the radar for the next session.

CNBC hosts Delivering Alpha on Wednesday

Key stock pickers include Nelson Peltz, David Einhorn and Jagdeep Singh Bachher, chief investment officer and vice president of investments at the University of California. We’ll also hear from Gerry Cardinale of RedBird Capital, who is appearing with Ben Affleck. Watch CNBC TV in the afternoon.

Follow the activists

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Honeywell shares in 2024

The markets

The S&P 500 fell for the first time since last week’s election, snapping a five-day string of gains. It dropped about 0.3%. It is up 3.5% in a week, and the index is up nearly 5% in November.
The Nasdaq Composite also fell for the first time since the election, declining less than 0.1%. It is up nearly 6.6% in November, and it has gained 4.6% in a week.
The Dow Jones Industrial Average lost nearly 1%. It is still up 5% in November, and it’s up 4% in a week.
The Russell 2000 lost almost 2% Tuesday.
Within the Nasdaq 100, 27 of the stocks have an relative strength index reading over 70. This generally means they’ve had a big run and are considered overbought, but that doesn’t mean they’re in for an immediate drop. Zoom Video is at the top of the list with a relative strength index of 87.58. The stock is up 15.5% in November. 

CyberArk Software

The cyber defense stock reports numbers in the morning before the bell.
The stock is up 11% since last reporting three months ago.
CyberArk is 2.55% from the October 18 high.

Stock chart icon

CyberArk Software in 2024

Tencent

The stock took a beating Tuesday, down about 5.5%.
The company reports results Wednesday before the bell. It is down 17% in three months.
Tencent is 31% from the May high.

The 10-year Treasury More

The Public Service Loan Forgiveness program may be at risk with the reelection of former President Donald Trump.
Here’s what borrowers should know.

10’000 Hours | Digitalvision | Getty Images

Current borrowers should remain entitled to relief

While the program remains in effect, borrowers are entitled to the relief, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

“Don’t panic,” Mayotte said. “PSLF is written into federal law, by a Republican president, and it would take an act of Congress to eliminate it.”
As of now, Republicans have a majority in the Senate. The House is still up for grabs, with several races too close to call.
Yet even if both chambers are under GOP control, it’s not clear “all the Republicans want it gone,” Mayotte said.
More from Personal Finance:28% of credit card users are paying off last year’s holiday debtHoliday shoppers plan to spend more while taking on debt2 in 5 cardholders have maxed out a credit card or come close
But what if they do vote to do away with the program?
“It wouldn’t be retroactive,” Mayotte said.
That means current borrowers would still be able to work toward loan forgiveness under the program.
“So, worst-case scenario, it would be for loans made on or after the date of such a law enactment,” Mayotte said.
Higher education expert Mark Kantrowitz agreed that’s how such a change would probably play out.
“Most likely the change would apply only to new borrowers,” Kantrowitz said. “Existing borrowers would be grandfathered in.”
The Trump campaign did not immediately respond to a request for comment from CNBC.

What borrowers can do

With the PSLF help tool, borrowers can search for a list of qualifying employers and make sure they’re on track for the relief. They should also access the employer certification form at StudentAid.gov.
That form will confirm that you’re working in an eligible job and generate an updated tally of how many qualifying payments you’ve made, Kantrowitz said.
Try to fill out this form at least once a year, he added. And keep records of your confirmed qualifying payments. To get your remaining debt excused, you need 120 qualifying payments. More

Heading into the peak holiday season, some shoppers are still paying off the gifts they purchased in 2023.
Still, Americans, overall, are doing better when it comes to managing their credit card debt compared with previous years.
Recent wage gains and lower inflation “may be driving consumers toward a financial equilibrium,” said TransUnion’s Paul Siegfried.

Americans tend to overspend during the holiday season.
In fact, some borrowers are still paying off debt from last year’s purchases.

To that point, 28% of shoppers who used credit cards have not paid off the presents they bought for their loved ones last year, according to a holiday spending report by NerdWallet. The site polled more than 1,700 adults in September.  
However, this is a slight improvement from 2023, when 31% of credit card users had still not paid off their balances from the year before.
More from Personal Finance:Here are the best ways to save money this holiday season2 in 5 cardholders have maxed out a credit card or come closeHoliday shoppers plan to spend more
Growth in credit card balances has also slowed, according to a separate quarterly credit industry insights report from TransUnion released Tuesday.
Although overall credit card balances were 6.9% higher at the end of the third quarter compared with a year earlier, that’s a significant improvement from the 15% year-over-year jump from Q3 2022 to Q3 2023, TransUnion found.

The average balance per consumer now stands at $6,329, rising only 4.8% year over year — compared with an 11.2% increase the year before and 12.4% the year before that.
“People are getting comfortable with this post-pandemic life,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “As inflation has returned to more normal levels in recent months, it has also meant consumers may be less likely to rely on these credit products to make ends meet.”
Recent wage gains have also played a role, according to Paul Siegfried, TransUnion’s senior vice president and credit card business leader. Lower inflation and higher pay “may be driving consumers toward a financial equilibrium,” he said.

Still, spending between Nov. 1 and Dec. 31 is expected to increase to a record total of between $979.5 billion and $989 billion, according to the National Retail Federation.
Shoppers may spend $1,778 on average, up 8% compared with last year, Deloitte’s holiday retail survey found. Most will lean on plastic: About three-quarters, 74%, of consumers plan to use credit cards to make their purchases, according to NerdWallet.
“Between buying gifts and booking peak-season travel, the holidays are an expensive time of year,” said Sara Rathner, NerdWallet’s credit cards expert. However, this time around, “shoppers are setting strict budgets and taking advantage of seasonal sales.”

How to avoid overspending

“There’s no magic wand, we just have to do the hard stuff,” Candy Valentino, author of “The 9% Edge,” recently told CNBC. Mostly that means setting a budget and tracking expenses.
Valentino recommends reallocating funds from other areas — by canceling unwanted subscriptions or negotiating down utility costs — to help make room for holiday spending.
“A few hundred dollars here and there really adds up,” she said. That “stash of cash is one way to set yourself up so you are not taking on new debt.”

How to save on what you spend

Valentino also advises consumers to start their holiday shopping now to take advantage of early deals and discounts or try pooling funds among family or friends to share the cost of holiday gifts.
Then, curb temptation by staying away from the mall and unsubscribing from emails, opting out of text alerts, turning off push notifications in retail apps and unfollowing brands on social, she said.
“It will lessen your need and desire to spend,” Valentino said.
If you’re starting out the holiday season debt-free, you’re in a “strong position” to take advantage of credit card rewards, Rathner said.
Credit cards that offer rewards such as cash back or sign-on bonuses will offer a better return on your holiday spending, she said.
However, if you are planning on purchasing big-ticket items to work toward such bonuses, make sure you’re able to pay off the balance in full to avoid falling into holiday debt, Rathner said.

What to do if you have debt from last year

People walk by sale signs in the Financial District on the first day back for the New York Stock Exchange (NYSE) since the Christmas holiday on December 26, 2023 in New York City.
Spencer Platt | Getty Images

If you have credit card debt from last year, the first thing you can do is “look for ways to lower the interest you’re paying on that debt,” said NerdWallet’s Rathner. 
A balance transfer card, for example, typically offers a 0% annual percentage rate for a period of time, which usually spans from months to even a year or more.
If you move your debt from a high-rate credit card, it may help you save hundreds or even thousands of dollars in interest payments, depending on how much you owe, Rather said.
“That keeps your debt from growing,” she said. 
But you need to pay off the debt in full before the interest-free period ends to fully benefit, Rathner noted.
Additionally, there are a few caveats: You generally need to have good-to-excellent credit to qualify for the balance transfer and there may be fees involved. A transfer fee is typically 3% to 5% of the balance that you transfer over, Rathner said. 
While you may need to budget for that detail, “the savings on the interest might be higher than the fee you would pay,” she said.
Otherwise, you may be able to consolidate into a lower interest personal loan, depending on your creditworthiness. Similarly, cardholders who keep their utilization rate — or the ratio of debt to total credit — below 30% of their available credit may benefit from a higher credit score, which paves the way to lower-cost loans and better terms.
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ETF Strategist

ETF Street
ETF Strategist

Investors who want income may turn to dividend-paying strategies.
When choosing between funds, it’s important to consider whether the strategy fits your goals and what you will pay, experts say.

Jamie Grill | Tetra Images | Getty Images

For investors who want income, dividends may provide an answer.
Dividends are corporate profits that companies pay to shareholders in the form of either cash or stock.

In comparison to other income-paying investments — such as certificates of deposit, bonds or Treasurys — dividends may provide the opportunity for more appreciation, said Leanna Devinney, vice president and branch leader at Fidelity Investments in Hingham, Massachusetts.
“Dividends can be very attractive because they offer the opportunity for growth and income,” Devinney said.
Dividend investment options may come in the form of single company stocks or dividend-paying funds, like exchange-traded funds or mutual funds.

More from ETF Strategist

Here’s a look at other stories offering insight on ETFs for investors.

With individual stocks, it’s easy to see the dividend a company may offer in exchange for owning its share, Devinney said. Notably, not all companies pay dividends.
However, dividend-paying funds like ETFs or mutual funds may provide a broader exposure to dividend securities, often at lower costs, she said.

For investors who are considering putting a portion of their portfolios in dividend-paying strategies to fulfill their income-seeking goals, there are some things to consider.

What kind of dividend-paying fund fits my goals?

Generally, there are two types of dividend funds from which to choose, according to Daniel Sotiroff, senior analyst for passive strategies research at Morningstar.
The first group focuses on high dividend yield strategies. Dividend yield is how much a company pays in dividends each year compared to its stock price. With high-yield strategies, the investor is trying to get higher income than the market generally provides, Sotiroff said.
High-yield dividend companies tend to have been around for decades, like Coca-Cola Co., for example.
Alternatively, investors may opt for dividend growth strategies that focus on stocks expected to consistently grow their dividends over time. Those companies tend to be somewhat younger, such as Apple or Microsoft, Sotiroff said.

To be clear, both of these strategies have trade-offs.
“The risks and rewards are a little bit different between the two,” Sotiroff said. “They can both be done well; they can both be done poorly.”
If you’re a younger investor and you’re trying to grow your money, a dividend appreciation fund will likely be better suited to you, he said. On the other hand, if you’re near retirement and you’re looking to create income from your investments, a high-yield dividend ETF or mutual fund is probably going to be a better choice.
To be sure, some fund strategies combine both goals of current income and future growth.

How expensive is the dividend strategy?

Another important consideration when deciding among dividend-paying strategies is cost.
One dividend fund that is highly rated by Morningstar, the Vanguard High Dividend Yield ETF, is well diversified, which means investors won’t have a lot of exposure to one company, he said. What’s more, it’s also “really cheap,” with a low expense ratio of six basis points, or 0.06%. The expense ratio is a measure of how much investors pay annually to own a fund.
That Vanguard fund has historically provided a yield of about 1% to 1.5% more than what the broader U.S. market offers, which is “pretty reasonable,” according to Sotiroff.

While investors may not want to add that Vanguard fund to their portfolio, they can use it as a benchmark, he said.
“If you’re taking on higher yield than that Vanguard ETF, that’s a warning sign that you probably have exposure to incrementally more volatility and more risk, Sotiroff said.
Another fund highly rated by Morningstar is the Schwab U.S. Dividend Equity ETF, which has an expense ratio of 0.06% and has also provided 1% to 1.5% more than the market, according to Sotiroff.
Both the Vanguard and Schwab funds track an index, and therefore are passively managed.
Investors may alternatively opt for active funds, where managers are identifying companies’ likelihood to increase or cut their dividends.
“Those funds typically will come with a higher expense ratio,” Devinney said, “but you’re getting professional oversight to those risks.” More