I just sat down with Doug Hoyes of Hoyes Micholas & Blair Mantin of Sands & Associates  to discuss delinquency rates.  For an interesting discussion you can listen to the whole show at the Debt Free In 30.

Too many people focus on delinquency rates and see this as a sign of a strong or weak economy.  But it is a measure that I believe is overrated at best.  Blair makes a great point that this type of economic data “gives people a false sense of security, that it’s okay if you just make the minimum payment.”  When we know that making only minimum payments is a clear path to trouble.  It was the consensus that right now the issue isn’t the delinquency rate, but the level of debt in relation to the artificially low interest rates that we have been exposed to.

At time like this is essential for the wary consumer to recognize that at some point interest will increase, it always has.  If we are not aware of t

hat, if we are not actively paying debt down, when the tide turns there will be many who can manage the result.

It was a fun show, I have a great deal of respect for both Doug and Blair and was fortunate to be involved.

If interested you can access the full transcripts here: Debt Free In 30 – Consumer Debt Levels.