Credit card defaults in the U.S. have soared to their highest levels since the Great Recession, reflecting financial strain on many households. According to BankRegData, $46 billion in delinquent credit card debt was written off during the first nine months of 2024—a 50% increase compared to the same period last year.
This marks a significant financial challenge, especially for lower-income households struggling with inflation and high interest rates. Credit card balances have surged by $270 billion over the past two years, exceeding $1 trillion for the first time in 2023. Over $37 billion in balances are currently overdue by at least 30 days.
Average American makes $59K.
Has on average $250K in mortgage.
$25K in car loan.
$8K in credit card debt.
Less than $400 saved.
Works 50 hours. Has no health insurance.
He is angry right now, he wants better life. He wants more money. As simple as that.
— tic toc (@TicTocTick) December 29, 2024
CapitalOne, one of the largest credit card issuers, reported an annualized write-off rate of 6.1% in November, up from 5.2% a year earlier. These figures point to rising delinquency rates across the country.
Mark Zandi, chief economist at Moody’s Analytics, highlighted the uneven impact of the economic strain. “High-income households are fine, but the bottom third of U.S. consumers are tapped out,” he said. WalletHub’s Odysseas Papadimitriou added that the rising delinquencies indicate even greater financial struggles ahead.
🚨 The jump in US credit card defaults to the highest level since 2010 is a wake-up call! As consumers grapple with mounting debt, it's crucial to rethink our spending habits. Are we facing a new financial reality? 📉💳 Let’s discuss how to navigate thi https://t.co/XNKnnWUcPm
— Grand Panda (@grandiopanda) December 30, 2024
Inflation has left many Americans unable to manage their finances effectively. The Federal Reserve has maintained high borrowing costs to combat inflation, further straining household budgets. Over the past 12 months, Americans paid $170 billion in credit card interest.
While banks have yet to release their fourth-quarter data, preliminary reports indicate a growing number of consumers are falling behind on payments, raising concerns about broader economic stability.
