Credit Card Defaults Spike to Highest Level Since Aftermath of 2008 Financial Crisis

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Posted on 12/30/2024 7:59:44 AM PST by ChicagoConservative27

American credit card defaults have risen to the highest levels since the aftermath of the 2008 financial crisis as consumers grapple with years of high inflation.

Credit card lenders wrote off $46 billion in delinquent loan balances in the first three quarters of 2024, a 50 percent increase from the same period last year. These forms of write-offs are are viewed as a highly monitored measure of loan distress.

This is the highest level since 2010, according to industry data gathered by BankRegData.

Mark Zandi, the head of Moody’s Analytics, said, “High-income households are fine, but the bottom third of US consumers are tapped out. Their savings rate right now is zero.”

The Financial Times wrote that, although banks do not have data for the fourth quarter, there are worrying signs about the state of the American consumer:

The sharp rise in defaults is a sign of how consumers’ personal finances are becoming increasingly stretched after years of high inflation, and as the Federal Reserve has left borrowing costs at elevated levels.

Banks have yet to report their fourth-quarter numbers but the early signs are that more consumers are falling significantly behind on what they owe. Capital One, the US’s third-largest credit card lender, after JPMorgan Chase and Citigroup, recently said that as of November its annualised credit card write-off rate, which is the percentage of its overall loans that are marked as unrecoverable, hit 6.1 per cent, up from 5.2 per cent a year ago.

(Excerpt) Read more at breitbart.com ...

Biden will forgive credit card debt before he leaves office. (S)

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