Surging Credit Card Delinquencies Point to Consumer Stress

February 6, 2024

After years of rampant inflation, American consumers have been relying more and more on credit cards to get by, but now more are having trouble paying off the balance and missing payments.

Credit card delinquencies jumped more than 50% last year as total consumer debt climbed to $17.5 trillion, according to a report from the New York Federal Reserve.

Several categories of debt saw an increase in “serious delinquencies,” meaning more than 90 days past due, but none more so than credit card debt. Of the $1.13 trillion in credit card debt, 6.4% was considered seriously delinquent during the fourth quarter of 2023, a jump of 59% from the end of 2022, when serious delinquencies were at roughly 4%.

The delinquency rate was also up for mortgages, auto loans, and the miscellaneous “other” category, while it was lower for student loans and home equity credit lines. All told, 1.42% of all debt was considered seriously delinquent at the end of the year, up from 1% at the end of 2022.

Researchers from the New York Fed said that rising rates have likely played a role in delinquency rates. Since the central bank began raising rates, the typical annual rate on credit cards has jumped from about 14.5% to 21.5%, according to Fed data.

Those higher interest rates matter because Americans are racking up higher balances and fewer are paying them off each month. A separate report from TransUnion found that balances have jumped 10% over the past year, reaching a record-high of $6,360.

Read all Blog posts