Credit card delinquencies are surging
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A growing number of Americans are falling behind on their monthly credit card payments as they continue to battle high inflation and interest rates, according to New York Federal Reserve data published Tuesday.
Credit card delinquencies, which have already surpassed their pre-pandemic levels, continued to rise in the three-month period from January to March.
The flow of credit card debt moving into delinquency hit 8.9% in the first quarter at an annualized rate, compared with an 8.5% rate the previous quarter and 5.87% at the end of 2023. In fact, the percentage of credit card balances in serious delinquency climbed to its highest level since 2012.
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«In the first quarter of 2024, credit card and auto loan transition rates into serious delinquency continued to rise across all age groups,» said Joelle Scally, regional economic principal within the Household and Public Policy Research Division at the New York Fed.
«An increasing number of borrowers missed credit card payments, revealing worsening financial distress among some households.»
In this photo illustration, a credit card is used to pay for gasoline Feb. 7, 2024, in San Anselmo, Calif. (Justin Sullivan/Getty Images / Getty Images)
New York Fed researchers were uncertain why there was such a notable uptick in delinquencies given the low unemployment rate, but they offered several theories.
It could be that consumers drained the excess savings they built up during the pandemic but are still spending at high levels – even though that money is gone. The spike may also be the
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