The Journal reports that debt-collection lawsuits — suits over unpaid credit-card bills — have surged past pre-pandemic levels in multiple states.
Behind the suits sits a very large number. Americans are carrying $1.25 trillion in credit-card debt, and lenders are losing patience.
A lawsuit is what patience looks like when it runs out.
The Other Half of the 0.2%
Put this next to Thursday’s other consumer datapoint and the picture sharpens.
Retail growth slowed to 0.2%. The tempting read was a consumer choosing prudence — a nation nobly skipping the new sneakers.
The lawsuit data suggests something harder. For a lot of households, the cutback is not a choice.
The 0.2% retail number is not austerity as virtue. For many families it is austerity as summons — a summons is the court paper that starts a lawsuit.
Same statistic, two very different households inside it. One is saving by choice. The other is being sued into it.
Numbers like 0.2% look calm from a distance. Up close, some of that calm is a kitchen table covered in envelopes nobody wants to open.
How the Portfolio Leans
The Capital Wealth Growth Portfolio already leans the right way here.
Staples over discretionary — discretionary means the stuff people can skip when money is tight. Staples are the stuff they cannot.
We also keep a wary eye on consumer credit. Lenders collecting through courtrooms is not a growth strategy; it is an ending.
This is also why we do not chase the flashiest consumer names in a year like this. Companies selling can-skip goods to being-sued customers have a math problem.
Nothing new to buy or sell on this story. The positioning already assumed a stretched consumer, and the stretched consumer keeps confirming it.
The Trade That Beats Every Portfolio
Now the planning point, which matters more than the trading point.
At today’s card rates, no portfolio return beats paying off the balance. Not ours. Not anybody’s.
Paying off a credit card is the highest-yield, zero-risk trade available to any household. It is also free to make.
There is no minimum investment, no advisor fee, and no market risk. The return arrives every month the balance stays at zero.
We say this in every review, to every client, at every account size. It is the rare piece of financial advice with no fine print.
If someone you love is carrying a balance, forward them this page. The best trade of their year is sitting in their mailbox, disguised as a bill.