Student loan payments may be to blame for a spike in credit card delinquencies

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A growing number of Americans are falling behind on their monthly credit card payments, and student loan repayments could be to blame, according to new data published by the Federal Reserve Bank of New York.

Credit card delinquencies tumbled in the early days of the pandemic as the government sent trillions in stimulus money to American homes and businesses. However, delinquencies have steadily ticked higher as a result of high inflation and interest rates, which have hindered Americans' ability to pay off their credit card balances each month.

As of December, about 3.1% of outstanding credit card debt was in some stage of delinquency, up from the 3% recorded the previous quarter but still down from the average 4.7% rate seen before the COVID-19 pandemic began, findings from the New York Fed show.

«Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels,» said Wilbert van der Klaauw, economic research adviser at the New York Fed. «This signals increased financial stress, especially among younger and lower-income households.»

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In this photo illustration, a credit card is used to pay for gasoline on Feb. 7, 2024 in San Anselmo, California. (Photo Illustration by Justin Sullivan/Getty Images / Getty Images)

Credit card delinquencies continued to rise from their pandemic-era lows during the fourth quarter. In the three-month period from October to December, about 8.5% of credit card debt moved into delinquency, compared with an 8.01% uptick during the third quarter and