Higher-income American consumers are showing signs of stress
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Inflation, job concerns, and already high interest rates are putting the squeeze on many American consumers.
Inflation, job concerns, and already high interest rates are putting the squeeze on many American consumers.
Now, even high earners, defined as people with incomes of $150,000 or more, are showing signs of stress. These borrowers are increasingly having trouble meeting payments on credit cards, auto loans and mortgages.
The delinquency rate among high earners is near a five-year high, rising 130% over the last two years from January 2023 to December 2024, according to a new report by VantageScore, a national credit company, released early to CNBC.
“We’ve seen significant increases in services cost, like home insurance and auto insurance, and that is hitting the high-income consumer harder than most. That’s what’s driving that delinquency rate,” said VantageScore CEO Silvio Tavares in an interview with CNBC.
Tavares says for the most part consumers are being cautious with credit. While credit card balances rose 2.9% year over year in December 2024, that pace was keeping with inflation. Consumers have some running room before hitting their limit.
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