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Consumer Debt Score Stabilizes

NFCC gauge shows decline in people’s financial distress.

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Prices at the gas pump are among the factors impacting consumers’ budgets. PHOTOGRAPHY: Ladanifer/iStock.com

As prime holiday shopping season begins, there is a glimmer of hope for millions of Americans who have been struggling with higher prices and debt obligations. The latest NFCC Consumer Debt Score, which gauges how comfortable average Americans are with their level of unsecured debt, saw a moderate decline to 64 during the third quarter of 2023, a sign that more Americans have been able to create a budget and stick to it.

“For only the second time since pandemic-related stimulus payments allowed many families to pay down existing debt, we saw a small but notable decline in consumer financial distress,” said NFCC CEO Mike Croxson.

The NFCC Consumer Debt Score has a baseline of 50, indicating a medium level of distress among consumers about their ability to repay their debts, particularly credit card debt. Even with a decrease from a score of 66 during the second quarter of 2023, the NFCC Consumer Debt Score has risen by 67 percent since its low in the second quarter of 2021 as many families returned to pre-pandemic routines of shopping, dining out and travel, coupled with record-setting inflation on everyday items such as groceries and gas. This substantial increase highlights a noteworthy change in consumer financial distress over a relatively short period of time.

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