A historic economic collapse is on the horizon thanks to one item most every American has in their pocket

The Federal Reserve and other major institutions have completely destroyed the American economy.

But it’s not just the Fed and others within the ruling class who control the fate of our nation’s economic status.

And now a historic economic collapse is on the horizon thanks to one item most every American has in their pocket.

American credit card defaults at record high

Inflation has taken its toll on many Americans, and many are defaulting on their credit cards at a rate that hasn’t been seen in over a decade.

This consumer activity has serious fiscal implications as we move into 2025, as more people use easy credit to fund their lifestyle.

Combined with high interest rates, massive penalties, and over-the-top fees, credit cards have dealt a major blow to the financial health of millions of American households.

Credit card defaults have now jumped 50% – their highest level since 2010.

According to the Financial Times, card lenders wrote off $46 billion in seriously delinquent loans in the first nine months of 2024.

That’s a 50% increase over 2023, and the highest level seen in 14 years.

Many Americans have felt “forced” to use credit cards to pay for everyday expenses as the cost of living continues to skyrocket.

Approximately 75.4% of all U.S. consumers now have at least some amount of credit card debt, according to data from PYMNTS Intelligence research.

That number accounts for people across all income levels, but it jumps to over 90% for Americans living paycheck-to-paycheck.

The average outstanding balance among those struggling to make ends meet is $7,038, while those who say they live comfortably have an average outstanding balance of $5,766.

Mark Zandi, the head of Moody’s Analytics, said, “High-income households are fine, but the bottom third of US consumers are tapped out. Their savings rate right now is zero.”

As a good rule of thumb, people should have at least one month’s worth of expenses put away in savings to cover an emergency.

However, the bulk of Americans still don’t even have $400 saved up.

Credit card debt is one of the most detrimental forms of debt due to high interest rates and the lure of “easy money.”

A person who owes $10,000 on a credit card with a 20% interest rate and makes monthly payments of $300 per month would pay it off in more than four years.

They’d also pay $4,718 in interest rate charges on top of the $10,000 principal they must pay back to the issuer, not accounting for any penalties or late fees.

The numbers are staggering

Americans now have over a billion credit cards with an approximate balance of over $1 trillion on those cards.

To put things into perspective, the combined GDP of the 100 poorest countries is around $500 billion, which means that the amount Americans owe on their credit cards is twice as much as the GDP of the 100 poorest countries in the world combined.

And to make matters worse, the top-10 credit card issuers in America control nearly 82% of the credit card market.

There are currently no federal laws limiting the interest rates that credit card companies can charge, so for them, the sky is the limit.

As Americans default on these cards, they’re left with little to nothing else to cover expenses, potentially leading to an even bigger economic crisis in 2025.