Credit card delinquency rates hit a nearly 12-year high
Consumers are struggling to pay off their credit card debt even as many trim their spending, a new Philadelphia Fed report finds.
People are struggling to pay off their credit card debt even as many trim their spending.
The share of credit card balances that are past due reached the highest level ever in the first quarter, according to data the Philadelphia Federal Reserve has tracked since 2012.
The delinquencies come as consumers have leaned heavily on borrowing to pay for everything from groceries to vacations — expenses that have risen sharply during the pandemic recovery — and as higher interest rates to curb inflation have pushed card rates to record highs.
The Philadelphia Fed report, released Wednesday, found the number of accounts with balances at least 30 days past due fell in the first quarter, and total card balances dipped somewhat as well. Both are seasonal trends that typically occur at the start of the year after the holiday spending season, the report noted.
Even so, “account holders who are behind have larger balances left unpaid,” the researchers wrote.
Rating: 5