The David Lin Report Credit Card Debt Hits $1.2 Trillion; When Will Debt Bomb Explode? | Ted Rossman
Jul 9, 2025
Ted Rossman, Senior Industry Analyst at Bankrate, sheds light on the alarming rise of U.S. consumer debt, now exceeding $1.2 trillion. He discusses credit card delinquency trends and the impact of 'Buy Now, Pay Later' programs, which complicate credit scores and borrowing. Rossman warns about phantom debt and urges families to boost financial literacy to navigate these challenges. He also shares insights on choosing the right credit card and emphasizes the need for personal responsibility in managing debts as economic pressures increase.
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BNPL Impact on Credit Scores
- Buy Now, Pay Later (BNPL) is now partially included in credit scores, but only with the latest FICO versions.
- Responsible BNPL use can improve credit scores, but poor use can harm them, similar to credit cards.
BNPL's Shift to Credit Card-Like Debt
- Longer BNPL plans often charge interest rates similar to credit cards, sometimes 15-25%.
- BNPL is becoming more credit card-like as it extends beyond the traditional interest-free weeks.
BNPL's Small Share of Debt
- BNPL debt currently is a small fraction of credit card debt, about 1-3%.
- BNPL mainly covers short-term loans paid off quickly, unlike revolving credit card debt.