A big problem with credit cards is on the rise
The trend could worsen if the economy falters, but you can protect yourself.
The warning signs are flashing. American consumers are struggling with credit card debt. The impact could be wide-ranging — even affecting people who keep up with their payments.
One particular warning sign that’s getting more urgent is the credit card delinquency rate. This measures the percentage of credit card bills past their due dates.
The Federal Reserve Bank of New York’s Household Debt and Credit Report shows that as of the second quarter of 2024, the percentage of credit card balances that are 90 days or more overdue is the highest it has been since the first quarter of 2012. That was back when the economy was still recovering from the Great Recession.
Late payments are rising, which is no surprise. According to the same New York Fed report, total credit card debt is at an all-time high, having risen by more than 45% in just three years. Federal Reserve figures show the average interest rate charged on credit cards has jumped by nearly 7% since mid-2020. Consumers have taken on a record amount of credit card debt at the wrong time, resulting in bigger credit card bills.
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