Credit Card Delinquencies Surge 50%

Sharing is Caring!

As the American economy treads a delicate path, signs of stress are emerging from an unexpected quarter – the wallets of consumers. The New York Federal Reserve’s recent report unveils a startling revelation: credit card delinquencies soared by more than 50% in 2023, reaching levels not seen since the Great Recession. With total consumer debt swelling to a staggering $17.5 trillion, questions arise about the true nature of a “strong economy.”

Delinquency rates on credit cards and auto loans have spiked to their highest since the Great Recession, painting a concerning picture. The American consumer, often hailed for their resilience, now faces challenges as household balance sheets experience emerging stress. The New York Fed’s quarterly report on household debt and credit reveals that aggressive interest rate hikes by the Federal Reserve are taking a toll on consumers grappling with the higher cost of borrowing.

See also  Recession In Mid 2024? Bank Credit And Deposit Growth NEGATIVE After The Stimulus Has Worn Out (EU Ordered To Accept 75 Million More Migrants)

Wilbert van der Klaauw, an economic research adviser at the New York Fed, voices his concerns, stating, “Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels.” This trend signals increased financial stress, particularly among younger and lower-income households.

The numbers tell a sobering tale: an annualized 8.5% of credit card balances and 7.7% of auto loan balances moved into delinquency status in the final months of 2023. While other types of debt, such as student loans and mortgages, maintain delinquency rates below pre-pandemic levels, the overall delinquency rates rose slightly to 3.1% in the fourth quarter.

Adding to the concerns, the New York Fed highlights that missed federal student loan payments won’t be reported until the end of this year, potentially skewing the reported rates of delinquency lower.

See also  Elon Musk claims Biden allowing migrant surge to pack Dem voter rolls


Views: 230

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.