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Israel

More Than A Third of Israeli Households Spend More Than They Earn, As Living Costs Rise

More than one-third of Israeli households spend thousands of shekels more than their monthly incomes allow and cannot make ends meet, as they struggle with a series of tax and price hikes during the ongoing war, while interest rates remain high.  

An estimated 2.5 million Israeli households are overdrawn in their bank accounts, or about 39% of the population in Israel over the age of 18 as of April 2024, according to data by Fresh Start, an Israeli non-profit organization that assists highly indebted households and businesses.  

The latest Bank of Israel data released this week showed that Israeli banks charged households with accounts in overdrafts a steep 12.7% interest on average in November 2024, up from an average of 11% at the end of 2023. 

That compares with an average of 9% interest households were paying on consumer credit loans. Overdrafts of Israeli citizens reached NIS 9.75 billion ($2.7 billion) as of the end of November, according to the data. Meanwhile, the average interest Israeli banks pay on shekel deposits ranges between 3.5% to 4% on average. 

The wide gap leads to the public paying very high interest rates on their debt, and it is deepening the personal finance troubles of households. As a result, thousands of families in Israel spend more than they earn, and fall into an economic trap of high interest rates and an inability to pay off the debt. (TOI/VFI News)

“Dear Lord, we pray in Yeshua’s name that You take care of the physical needs of Your people and help them pay off all the debts they have. Please, cause us to first seek Your Kingdom, for You have assured us that when we do, all these things will be added onto us. You have proven Your faithfulness time and time again and we trust, love, and honor You. May You keep our people from being despaired over their financial situations but be of good cheer while seeking Your Son, Your Kingdom, and the New Jerusalem.”