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Consumers spend more than $1 trillion on interest payments, largely due to increasing credit card debt

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Credit card debt makes up half of all interest paid in the last quarter of 2023.  (iStock)

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.

To get yourself out of your high-interest debt, consider consolidating it into a personal loan with a lower interest rate. You can also plug in some simple information into Credible’s free online tool to determine if a debt consolidation loan is your best option.

CONSUMER SPENDING AND DEBT ARE UP AS US ECONOMY BEGINS REBOUND

Credit card debts rose more in 2023 than auto loans, student loans

In 2023, credit card debt balances rose more than many other loan types. Credit card balances increased by $50 billion and are now at $1.13 trillion — a 4.6% increase, according to data released by the Federal Reserve Bank of New York.

“We saw a meaningful rise in the amount of consumer borrowing, mostly in the form of unsecured revolving credit, like credit cards.” Rob Haworth, a senior investment strategy director at U.S. Bank Wealth Management, said.

While total auto loan balances are higher than credit card debt, they rose by just $12 billion last year, much lower than credit card debt. Student loans, on the other hand, stayed relatively flat with a $2 billion increase in the last quarter of 2023.

Retail cards and other consumer loans also significantly added to the total debt last year, rising by $25 billion, the Federal Reserve Bank reported.

“As inflation became a burden and government payments ended, consumers were willing to take on more debt,” Matt Schoeppner, a senior economist at U.S. Bank, said.

If your credit card debt is becoming too much of a burden, a personal loan can help make your monthly payment more affordable. If you’re interested in consolidating or refinancing debt, it can help to have experienced loan officers on your side. Visit Credible to get all your loan consolidation and refinancing questions answered.

CREDIT CARD BALANCES SURGE PAST TRILLION DOLLAR MARK AS AMERICANS STRUGGLE TO BUILD SAVINGS

Renters deal with higher credit card debt than homeowners

The Americans who deal with the highest amounts of credit card debt are typically renters and lower income borrowers, AP News reported.

Inflation is to blame in many ways. Homeowners and wealthier individuals have the savings cushion to withstand times of high inflation, while renters and low-income earners don’t.

While inflation brought higher housing prices — great for sellers — it also raised the cost of many goods and rental costs, which has caused many renters to put their bills on high-interest credit cards.

The median rent across the country reached $1,712 in January, up by 18.3% from four years ago, according to Realtor.com. Although prices have been dropping slightly since the height of the pandemic, they’re still too high for many.

If you’re struggling to make ends meet and tackle your debt once and for all, a personal loan with a low interest rate can help. If you would like to get a sense of what debt consolidation loan options are available to you, visit Credible to compare rates and lenders.

HIGH DEBT IS CAUSING MORE CONSUMERS TO LIVE PAYCHECK-TO-PAYCHECK

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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DeepSeek AI excitement spills over to Hong Kong’s IPO market

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The Exchange Square Complex, which houses the Hong Kong Stock Exchange, on Feb. 26, 2025.

Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese companies are jumping at a window of opportunity to go public in Hong Kong as global investors start to return to the region, following the news of DeepSeek’s artificial intelligence breakthrough in late January.

It’s a level of excitement that has not been felt for more than three years, despite the overhang of U.S. trade tensions. Initial public offerings are a lucrative way for early investors in startups to exit and reap a return.

“Everyone is working so perfectly together. IPO candidates, the investor and the regulators,” said George Chan, global IPO leader at EY. “All these three parties are working so perfectly at this moment to actually cultivate a healthy Hong Kong IPO market.”

“The U.S. long-term fund has returned. It shows investors are getting more confident [about] China,” he said, adding that post-IPO performance has also been encouraging.

Chinese bubble tea giant Mixue went public on March 3 in a highly oversubscribed Hong Kong listing. And in a sign of more to come, Chinese battery giant Contemporary Amperex Technology (CATL) filed in February for what could be Hong Kong’s largest IPO since 2021, when short-video company Kuaishou listed.

Still think it is a little risky to bet on specific companies or industries in China: GAO Capital

News of China-based DeepSeek’s claims to rival OpenAI’s ChatGPT in reasoning capabilities at a lower cost — despite U.S. restrictions on Chinese access to advanced chips for training AI models — hit global tech stocks in late January, while spurring a rally in China. Hong Kong’s Hang Seng index surged to three-year highs.

Chinese President Xi Jinping also held a rare meeting with tech entrepreneurs in February, and Beijing has signaled greater support for the private sector, after taking a more restrictive stance in recent years.

Six initial public offerings in Hong Kong raised more than 1 billion Hong Kong dollars ($130 million) in the first quarter — a jump from just one listing of that size in the year-ago period — according to KPMG.

In all, the consultancy said, Hong Kong saw 15 IPOs in all of the first quarter which raised 17.7 billion HKD — the best start to a year since 2021.

There’s still a long way to go before recovering to that level. Hong Kong saw 32 IPOs in the first quarter of 2021 that raised a whopping 132.7 billion HKD, according to KPMG.

The Hong Kong stock exchange has adjusted its listing rules in the interim, including ones that support companies already listed in mainland China to offer shares in Hong Kong.

In addition to CATL, other companies listed in mainland China — Hengrui Pharmaceuticals, Mabwell, Haitian Flavoring and Food, Fortior Tech and Sanhua Intelligent Controls — are “actively seeking Hong Kong listings,” said Tiger Brokers, an underwriter of many Chinese companies’ IPOs in the U.S. and Hong Kong.

“Chinese regulators are encouraging companies to list in Hong Kong to broaden financing channels and support the outbound merger and acquisition needs of Chinese enterprises,” the firm said.

Still not out of the woods

Back in the summer of 2021, the fallout over Chinese ride-hailing company Didi’s IPO in the U.S. prompted both countries’ regulators to scrutinize what was then a wave of Chinese companies listing in New York.

The major issues have since been resolved and Beijing has clarified rules for Chinese companies wanting to list outside the mainland. But the Trump administration indicated in its “America First Investment Policy” that it could increase scrutiny on U.S. capital flowing to China, on top of heightened tariffs.

The U.S. and China have yet to indicate when their two leaders might meet in an attempt to forge a deal. A surge of interest in AI and tech are also not yet enough to speed up a recovery in China’s economy.

“At this point in time, all we can see is the good indicators,” EY’s Chan said. But “there could be one single incident happening which could pretty much reverse the trend.”

“Things tend to have a pattern,” he said. “If things can keep on for three months, four months, it will likely continue for the rest of the year.”

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Treasury Secretary Bessent says market woes are more about tech stock sell-off than Trump’s tariffs

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Treasury Secretary Scott Bessent speaks to reporters outside the West Wing after doing a television interview on the North Lawn of the White House on March 13, 2025 in Washington, DC. 

Andrew Harnik | Getty Images

Treasury Secretary Scott Bessent said Wednesday the sell-off in the stock market is due more to a sharp pullback in the biggest technology stocks instead of the protectionist policies coming from the Trump administration.

“I’m trying to be Secretary of Treasury, not a market commentator. What I would point out is that especially the Nasdaq peaked on DeepSeek day so that’s a Mag 7 problem, not a MAGA problem,” Bessent said on Bloomberg TV Wednesday evening.

Bessent was referring to Chinese AI startup DeepSeek, whose new language models sparked a rout in U.S. technology stocks in late January. The emergence of DeepSeek’s highly competitive and potentially much cheaper models stoked doubts about the billions that the big U.S. tech companies are spending on AI.

The so-called Magnificent 7 stocks — Apple, Amazon, Tesla, Alphabet, Microsoft, Meta and Nvidia — started selling off drastically, pulling the tech-heavy Nasdaq Composite into correction territory. The tech-heavy benchmark is down about 13% from its record high reached on December 16.

However, the secretary downplayed the impact from President Donald Trump’s steep tariffs, which caught many investors off guard and fueled fears of a re-acceleration in inflation, slower economic growth and even a recession. Many investors have blamed the tariff rollout for driving the S&P 500 briefly into correction territory from its record reached in late February. Wall Street defines a correction as a drop of 10% from a recent high.

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S&P 500, YTD

Trump signed an aggressive “reciprocal tariff” policy at the White House Wednesday evening, slapping duties of at least 10% and even higher for some countries. The actions sparked a huge sell-off in the stock market overnight, with the S&P 500 futures declining nearly 4% and the blue-chip Dow Jones Industrial Average shedding 1,100 points. The losses will likely but the S&P 500 back into correction territory in Thursday’s session.

“It’s going to be fine if we put the best economic conditions in place,” Bessent said in a separate interview on Fox Wednesday evening. “If you go back and look, the stock market actually peaked on the [DeepSeek] Chinese AI announcement. So a lot of what we have seen has been just an idiosyncratic tech sell-off.”

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Conservative cable channel Newsmax shares plunge more than 70% after a dizzying 2-day surge

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A Newsmax booth broadcasts as attendees try out the guns on display at the National Rifle Association (NRA) annual convention in Houston, Texas, U.S. May 29, 2022. 

Callaghan O’hare | Reuters

Shares of conservative news channel Newsmax plunged more than 70% on Wednesday as its meteoric rise as a new public company proved to be short-lived.

The stock tumbled a whopping 72% in afternoon trading, following a 2,230% surge in Newsmax’s first two days of trading after debuting on the New York Stock Exchange. At one point, the rally gave the company a market capitalization of nearly $30 billion — surpassing the market cap of legacy media companies like Warner Bros. Discovery and Fox Corp.

Newsmax was listed on the NYSE via a so-called Regulation A offering, instead of a traditional IPO. Such an offering allows small companies to raise capital without undergoing the full SEC registration process. The primary focus is to sell to retail investors, in this case It was sold to approximately 30,000 retail investors. 

The public offering indeed garnered the attention from retail traders, some of whom touted the stock as the “New GME” in online chatrooms. GME refers to the meme stock GameStop, which made Wall Street history in 2021 by its speculative trading boom.

Newsmax has a small “float,” or shares available for trading. Less than 6% of Newsmax shares, or 7.5 million shares out of a total of 128 million fully diluted shares, are available for public trading.

The conservative TV news outlet has seen its ratings rise with the election of President Donald Trump and other prominent Republicans — although it still falls behind the dominant Fox News. Overall, Newsmax ranks in the top 20 among cable network average viewership in both prime time and daytime, Nielsen said.

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