US credit card defaults have skyrocketed to their highest level in 14 years, with a 50% increase from the previous year. According to data analyzed by BankRegData, lenders wrote off over $46 billion in seriously delinquent credit card loans during the first nine months of 2024, marking the highest since 2010.
The report comes as Americans’ overall debt continues to rise, with total household debt reaching a new high of $17.94 trillion. This includes record-high balances on mortgages ($12.59 trillion), auto loans ($1.64 trillion), and student loan balances ($1.61 trillion).
Experts warn that the situation is becoming increasingly dire, particularly for lower-income households who are struggling to make ends meet. “High-income households are fine, but the bottom third of US consumers are tapped out,” said Mark Zandi, head of Moody’s Analytics. Their savings rate right now is zero.”
The New York Federal Reserve has reported that credit card debt hit a record high in September, climbing to $1.17 trillion and marking the highest level on record since 2003. The surge in delinquencies is attributed partly to inflation and higher interest rates.
“It’s like the dam is about to break,” said one researcher. “We’ve seen notably elevated flows into delinquency, particularly for credit cards as well as auto loans during the past few years.”
Source: https://www.foxbusiness.com/economy/us-credit-card-defaults-soar-highest-level-14-years