Credit card delinquency rates hit worst level on record

foxbusiness.com:

Portfolio Wealth Advisors President and CIO Lee Munson discusses the markets, the March CPI and earnings season.

Americans are drowning in credit card debt. 

New data published by the Federal Reserve Bank of Philadelphia shows that a growing number of Americans are struggling to make their monthly credit card payments as they continue to battle high inflation and interest rates.

All stages of credit card delinquency – 30, 60 and 90 days past due – rose during the fourth quarter of 2023 to the highest level since 2012. The researchers noted that it is typical for credit card performance to deteriorate at the end of the year as consumers ramp up their holiday spending.

Nearly 3.5% of card balances were at least 30 days past due at the end of December, an increase of about 30 basis points from the previous quarter. The percentage of debts that are 60 and 90 days late also rose.

HIGH INFLATION IS COSTING AMERICANS AN EXTRA $1K A MONTH

Stress among cardholders was «further underscored in payment behavior,» the report said. The share of accounts making minimum payments jumped 34 basis points from the third quarter. 

A new Biden administration rule has created an $8 ceiling for credit card late fees. (Photo by Matt Cardy/Getty Images / Getty Images)

Although the share of Americans paying off their credit card balance in full rose eight basis points, a 3.1% increase in revolving balances – which carry over from month to month – «implies higher card balances among a smaller group of revolvers.»

«Fourth quarter 2023 featured the worst card performance in the series,» the report said. «All stages of account-based delinquency reached series highs. Only the 90+ balance-based rate was under its series high, set over a decade ago.»