As US Credit Card Debt Soars, Record Number Of Americans Rely On Minimum Payments Amid Recession Fears And Trump Tariffs
A record-high percentage of U.S. households are making only minimum payments on their credit cards, according to new data released by Apollo Global Management Inc. Chief Economist Torsten Slok.
What Happened: In a report titled 'How are U.S. consumers and firms responding to tariffs?' Slok highlighted Federal Reserve data showing the share of accounts making only minimum payments has climbed above 11% as of the first quarter of 2025, the highest level recorded since tracking began in 2012.
Trending: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones.
The trend shows a clear upward trajectory over the past decade, with a brief dip during the early pandemic period in the second quarter of 2020, followed by an accelerated rise to current record levels.
This growing reliance on minimum payments comes as Americans' collective credit card debt reached an unprecedented $1.21 trillion by the end of 2024, up 7.3% from the previous year, according to Federal Reserve Bank of St. Louis data.Why It Matters: Financial experts warn that making only minimum payments is a troubling sign of increasing consumer stress. A recent Experian survey found 40% of Americans mistakenly believe minimum payments are an effective debt management strategy.
The credit strain coincides with recent warnings from major corporations about consumer spending pullbacks. Southwest Airlines Co. CEO Robert Jordan stated, 'I don't care if you call it a recession or not, in this industry that's a recession,' while PepsiCo Inc. CFO Jamie Caulfield admitted, 'Relative to where we were three months ago, we probably aren't feeling as good about the consumer now.'
Meanwhile, Apollo's Slok has separately warned of a 90% chance of recession in 2025 if current tariff policies under President Donald Trump remain unchanged, potentially worsening consumer financial challenges in the coming months.
Read Next:
It's no wonder Jeff Bezos holds over $250 million in art — this alternative asset has outpaced the S&P 500 since 1995, delivering an average annual return of 11.4%. Here's how everyday investors are getting started.
Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share!
Image Via Shutterstock
Send To MSN: Send to MSN
UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.
Get the latest stock analysis from Benzinga?
This article As US Credit Card Debt Soars, Record Number Of Americans Rely On Minimum Payments Amid Recession Fears And Trump Tariffs originally appeared on Benzinga.com
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
22 minutes ago
- Business Insider
'Sell America' is in full force for elite investor Jeffrey Gundlach, who warns of a US debt 'reckoning'
Investor Jeff Gundlach expressed caution over the US debt load in recent remarks. He said the "untenable" debt burden in America is heading for a "reckoning." The so-called "King of Bonds" said his firm is starting to introduce foreign currencies to its funds. Elite investor Jeffrey Gundlach is doubling down on the '" Sell America" trade. The DoubleLine Capital CEO, previously coined as the "King of Bonds," raised concerns about dollar-denominated assets when speaking at the Bloomberg Global Credit Forum on Wednesday. At the core of his comments is growing concern over America's swelling debt load, which is expected to get even bigger if President Donald Trump's " Big Beautiful Bill" eventually passes. "There's an awareness now that the long-term Treasury bond is not a legitimate flight-to-quality asset," Gundlach said, warning that a "reckoning is coming." He's referring to recent volatility in long-dated government bonds, like 30-year Treasurys, which haven't been trading like the sure-thing safe bet they're supposed to be. And Gundlach's firm has been putting its money where its mouth is. The DoubleLine CEO said his firm has been allocating more fund holdings to foreign currencies, and recommended that investors broadly start to think about boosting non-dollar-denominated holdings. Gundlach also sees the tide turning in the global stock market. "Things always take longer than people think, but it's happening in real-time, and the next one will be selective emerging market equities as opposed to the US," Gundlach said. 2 signs of stress Reuters Gundlach highlighted multiple unusual patterns that have been flashing in US markets this year. He sees these as signs that markets are likely concerned about the US debt, and that faith in US assets is starting to fade, he added. The US dollar and stocks. When the S&P 500 falls, the value of the dollar typically moves higher relative to other currencies, Gundlach said. But in April, when the S&P 500 tanked 20% amid the turmoil from Donald Trump's tariffs, the US dollar also weakened in value. The US Dollar Index, which weighs the greenback against a basket of foreign currencies, traded around 97.8 on Thursday, down 9% from levels at the start of the year. US Treasurys. When the Fed cuts interest rates, the 10-year US Treasury yield, which is tied to long-term interest rate expectations in the economy, typically falls. But the 10-year yield has climbed around 74 basis points from its low in September, around the time the Fed issued its first rate cut. "So I think what we have is recognition is that the interest expense for the United States is untenable if we continue running a $2.1 trillion budget deficit and we continue to have sticky interest rates," Gundlach said of the market shifts. Foreign investors have steadily added exposure to the US market over the last 17 years, Gundlach said, noting that the foreign net investment position in the US currently hovered around $25 trillion. "It's not inconceivable that some of the $25 trillion that came in just a couple — not even two decades — could go out," Gundlach said. "You should be thinking about increasing your allocations to non-dollar investments. And it's already working." Where to go if you're "selling America" Gundlach said there were several areas where investors could find safety away from US assets. Gold. Gundlach said he's continued to hold gold when it reached the level around $3,000 an ounce, and that he also holds stakes in gold miners. Previously, he's said that he believes gold could rally to as high as $4,000 an ounce as concerns swirl over tariffs, geopolitical conflict, and rising debt levels in the US. "I think gold is a real asset class. It's no longer for lunatic survivalists and wild speculators," he said. India. Gundlach also said investors should look into Indian assets, suggesting that India could see a similar run-up in economic growth that China has seen over the past three decades. India is riddled with many of the same economic issue China faced 35 years ago, Gundlach said, though be believed many of those issues can be fixed. "I don't know how long it will take, but that's one you buy," he said. Gundlach has consistently sounded the alarm on rising deficits in the US for years, and encouraged investors to pile into safe-havens. But forecasters on Wall Street have cast doubt on the "Sell America" trade, which is hinges on the idea that US will stop outperforming other assets in the world. JPMorgan and Morgan Stanley are among those who have said that they believe US assets will continue to dominate global markets.
Yahoo
26 minutes ago
- Yahoo
The Trump-Musk Feud Revealed Two Massive National Security Concerns
The spectacular falling out last week between U.S. President Donald Trump and Elon Musk, the billionaire who became one of his closest aides, put the spotlight on two dangerous developments affecting U.S. national security. The breakup provided Schadenfreude to the two men's critics and delivered entertainment value to social media audiences across the world. But it also revealed crucial vulnerabilities deriving from the ways in which important elements of U.S. military and intelligence operations, among others, have been personalized in both men's hands. While this is particularly alarming for the U.S., its repercussions extend beyond U.S. borders, to U.S. allies and others. When the world's most powerful man and the world's wealthiest entrepreneur started lobbing verbal missiles at each other from the social media platforms they each own, the crossfire included threats with serious geopolitical consequences. It may have looked like a high-profile schoolyard scuffle, but the two people involved are so powerful that the clash was far more consequential. It all started when Musk blasted Trump's massive budget bill currently making its way through Congress. If approved, the legislation would add trillions of dollars to the national debt. That was anathema to Musk, whose ostensible role in the Trump administration was to strengthen the government's finances. He initially vowed to slash $2 trillion in spending, later lowering his sights to $1 trillion. Ultimately the so-called Department of Government Efficiency, or DOGE, cut less than $200 million, and by some estimates it produced more costs than savings. Still, Musk lambasted the budget bill, and when Trump criticized him for that, it unleashed the furies, with Musk going as far as suggesting Trump should be impeached. To get more in-depth news and expert analysis on global affairs from WPR, sign up for our free Daily Review newsletter. Among the many threats the erstwhile allies traded was a warning Trump posted on his Truth Social platform that '[t]he easiest way to save money … is to terminate Elon's Governmental Subsidies and Contracts,' to which Musk responded on his X platform that his SpaceX company 'will begin decommissioning its Dragon spacecraft immediately.' The U.S. depends on the Dragon to send astronauts and supplies to the International Space Station, making it no small threat. Focusing on just these two posts, we can see the danger. First, there's the deeply alarming fact that Trump openly threatened to use the power of the presidency to exact personal revenge. We've seen this many times already since he returned to the presidency less than five months ago, but it's an undemocratic, corrupt practice that may be routine in dictatorships but should be unacceptable in solid democracies. Over the weekend, Trump once again threatened to use the power of his office against Musk, warning of 'very serious consequences' if Musk opted to fund Democratic candidates in next year's midterm congressional elections. In other words, he would use his office for political retribution, another affront against democracy. In addition to canceling contracts, as he suggested on Thursday when the war of words started, Trump could also unleash regulators on Musk's firms. As president, Trump's duty is to make decisions in the national interest. If the contracts made sense before the falling out, they should still make sense after it. But the contracts were actually deeply troubling before, and the dispute and threats highlight just how dangerously dependent the U.S., as well as other countries, have become on companies controlled by a single individual, and a volatile one with a troubling ideology at that. Musk retracted his threats to decommission Dragon, but the mere mention of the possibility alarmed NASA and shocked the space travel community. As mentioned, without Dragon, the U.S. has no way to send its astronauts and supplies to the ISS for now, as an alternative built by Boeing proved unreliable. But the threat to shut down Dragon is minimal compared to other off switches on Musk's console. The Pentagon and the entire U.S. security apparatus have become perilously dependent on Musk's companies. In addition to its contracts for the ISS, SpaceX carries out the overwhelming majority of all satellite launches around the globe, including those of military and intelligence satellites. Then there's the SpaceX subsidiary Starlink and its military version Starshield, both of which have become indispensable communications platforms, and not only for the United States. In 2022, when Russia launched its all-out invasion of Ukraine, Musk provided Starlink equipment to Kyiv, allowing Ukrainian troops to access the internet and communicate with each other and their commanders. A large part of the cost of that arrangement is borne by the Pentagon. The dangers of relying on Musk's company for such a fundamental function in the midst of an active war was already becoming evident when Musk started echoing Russian talking points. Then, a recently published biography of Musk claimed that when the Ukrainians asked for Starlink support in 2022 as part of an operation in Russian-occupied Crimea, Musk refused, saying that attacking the illegally annexed territory was 'going too far.' The revelation raised red flags at the Pentagon, where officials started speaking about the risk represented by Musk's ability to simply deny access to his products in the midst of a conflict. And yet, despite urgent calls by military officials for competitors to provide alternatives, few viable options have emerged. The Boeing space vehicle for taking astronauts to the ISS was a disappointment, and Eutelsat, a Franco-British competitor of Starlink, has launched only 600 satellites compared to Musk's 7,000, which represents the majority of the satellites orbiting Earth. What's more, Eutelsat's user equipment is more cumbersome. This March, while he was still working closely with Trump, Musk posted that 'Ukraine will inevitably lose' the war and noted ominously that Kyiv's 'entire front line would collapse' if he turned Starlink off. That's a not-so-veiled warning about Musk's power to cause havoc not only for Ukraine but for all of Starlink's users, of which the U.S. government is the biggest. The U.S. has a reported $22 billion in federal contracts with SpaceX. Musk already controls the launching of spy satellites as well as much of the communications systems the U.S. uses and would use should it go to war. If Trump launches construction of his promised missile shield, the Golden Dome, Musk would be a major player. This risky dependence on Musk is not the reason Trump has threatened to abuse his presidency against his former friend. That is all about revenge. But the U.S. should do everything in its power to ensure it can carry out its policies and objectives without being at the mercy of any single individual or company, even if that was not something Trump was concerned about before he had a reason to punish Musk. The acrimonious breakup, while entertaining, has also delivered two important warnings. It showed that Trump's use of his office for personal vendettas has become a regular, openly deployed practice in this presidency. And it has provided an urgent reminder that the U.S. and other countries have become dangerously dependent on the unpredictable and untrustworthy Musk. Frida Ghitis is WPR's senior columnist and a contributor to CNN and The Washington Post. Her WPR column appears every Thursday. You can follow her on Twitter and Threads at @fridaghitis. The post The Trump-Musk Feud Revealed Two Massive National Security Concerns appeared first on World Politics Review.
Yahoo
27 minutes ago
- Yahoo
Barbie-maker Mattel teams up with OpenAI, eyes first AI-powered product this year
(Reuters) -Mattel has teamed up with OpenAI to develop toys and games with artificial intelligence, and expects to launch its first AI-powered product later this year, the Barbie-maker said on Thursday. The company, which also makes Hot Wheels and Uno cards, plans to "bring the magic of AI to age-appropriate play experiences with an emphasis on innovation, privacy, and safety," it said. The move comes at a time when toy manufacturers are battling muted demand backdrop as consumers rein in spending to brace for the economic fallout of U.S. President Trump's shifting trade policy. Mattel will also incorporate OpenAI's advanced AI tools like ChatGPT Enterprise into its business operations to enhance product innovation, the company said. "With OpenAI, Mattel has access to an advanced set of AIcapabilities alongside new tools to enable productivity, creativity, and company-wide transformation at scale," said OpenAI operating chief Brad Lightcap. Over the last year, Mattel has relied on producing films, TV shows and mobile games based on its products such as Hot Wheels and Barbie to offset a slowdown in its core toy business. Last month, Mattel withdrew its annual forecast and said it would raise prices on some products sold domestically in a bid to mitigate higher supply chain costs. Sign in to access your portfolio
