US credit card defaults rise to their highest levels in 14 years

Experts are sounding the alarm over a new report indicating… credit card Loan defaults have soared this year, warning that the dam is about to break on record-high U.S. consumer debt.

During the first nine months of 2024, lenders wrote off more than $46 billion in seriously delinquent credit card loans, according to a report by the Financial Times citing data analyzed by BankRegData. This represents a 50% increase over the first three quarters of 2023, and the highest since 2010.

“High-income households are fine, but the bottom third of American consumers are being exploited,” Mark Zandi, head of Moody’s Analytics, told the Financial Times. “Their savings rate is now zero.”

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Referring to the results, Al Qubaisi’s message on X declared that “the credit card debt bubble is starting to burst.”

the New York Federal Reserve U.S. credit card debt reached another record high in September, rising to $1.17 trillion during the third quarter, marking the highest level recorded in Federal Reserve data dating back to 2003, I reported last month.

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Total household debt also rose to a new high of $17.94 trillion, along with mortgage balances ($12.59 trillion), auto loans ($1.64 trillion), and student loan balances ($1.61 trillion), the report showed.

In a phone call to discuss the report after its release, New York Fed researchers discussed the growth in debt stocks across the board, and the continued and “troubling” growth in Car loan And credit card delinquencies, and how stress and higher delinquency rates are concentrated among younger borrowers.

“We have seen a significant rise in flows into delinquencies, especially for credit cards as well as car loans over the past few years,” one researcher said. “This is something we would point to as a cause for concern — something to watch for.”

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They pointed to the rise in payments made by consumers on credit cards and auto loans, which is partly due to… To inflation And also because of high interest rates.