Delinquency rates across consumer debt classes are now brushing up against levels seen during the Global Financial Crisis. The New York Fed reports that 4.4% of all outstanding household debt is delinquent. “Loan delinquency rates remained ‘elevated,’ according to the report, at 4.4% of outstanding debt overall, with student loan delinquencies spiking sharply higher, into double-digits.” https://www.marketplace.org/story/2025/08/06/is-it-time-to-worry-about-rising-household-debt
Credit card and auto loan balances are falling, but delinquencies are rising. “Credit card balances fell by $29 billion from the previous quarter… auto loan balances declined by $13 billion… Transition into serious delinquency remained stable for auto loans, credit cards, and other debt.” https://www.newyorkfed.org/microeconomics/hhdc.html
Student loans are the sharpest mover. Delinquencies surged after reporting resumed this year. The federal pause ended May 5, 2025, now over 25% of the portfolio is either in default or late-stage delinquency. https://studentaid.gov/announcements-events/payment-pause-end
Mortgages are the outlier. Balances rose, but delinquency stayed low. “Mortgage balances increased by $199 billion… Transition into serious delinquency remained stable.” https://www.newyorkfed.org/microeconomics/hhdc.html
The spike isn’t just about missed payments. It’s about sequence. People are paying mortgages first. Then car loans. Then scraping by on credit cards. Student loans are falling off the list.
Credit card balances dropped but not because people paid them off. Charge-offs are rising. Banks are tightening credit. https://www.federalreserve.gov/releases/chargeoff/delallsa.htm
Auto loans look stable nationally. But subprime delinquencies hit 6.56% in January. Repossession rates are climbing in the South and Midwest. https://www.coxautoinc.com/market-insights/q1-2025-auto-finance-trends/
The Fed says banks aren’t panicking. But borrowers are. Delinquency is rising in every category except housing. That’s not stability. That’s triage.
APR chokehold: Credit card interest rates now average 23.99%. Minimum payments are just slow-motion default. https://www.bankrate.com/finance/credit-cards/current-interest-rates/
DTI mirage: National debt-to-income ratios look stable. But state-level data shows ratios above 2.0 in parts of Hawaii and Idaho. https://www.consumerfinance.gov/data-research/hmda/
Undetectable distress: Millions aren’t technically delinquent. They’re rolling debt, stacking interest, and quietly sinking. Debt settlement averages now range from 30–50% reductions. https://www.nclc.org/resources/debt-settlement-companies-2025-report/
Hierarchy of survival: Mortgage payments aren’t a sign of health. They’re a last stand. Everything else is being sacrificed. https://www.consumerfinance.gov/about-us/blog/behind-on-bills-what-we-learned-from-people-struggling-to-pay/