2025 could be the year of a "credit hangover," VantageScore chief strategy officer Rikard Bandebo tells Brad Smith. Bandebo breaks down what this means and what it signals about the health of the US consumer.
"The economy as a whole is doing pretty well," Bandebo says, noting, "What we see is that the consumer, for the most part, is actually going into 2025 pretty credit healthy."
"However, underneath that, there are some cracks, and what we're seeing is that there's going to be some particular segments of the consumer population that are going to struggle much more in 2025," the strategist adds. Despite consumers working to reduce their debt post-pandemic, US household debt has ballooned to record highs.
Bandebo explains that there is "a growing number of consumers who are actually really struggling to make ends meet with the big increase in costs that they've had since COVID, and as a result, they're actually relying more and more on products like credit cards or personal loans, or maybe even buy now, pay later as a way to subsidize their living. And the problem with that is it's digging them into a deeper credit hole."
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This post was written by Naomi Buchanan.