10.7% Credit Card Delinquency Rate in Q1 2024 Surpasses Pandemic Peak | Financial Strain Mounts with 18.9% Inflation Increase

Credit card delinquencies hit 10.7% in Q1 2024, surpassing pandemic levels as all age groups face financial strain amid rising debt and inflation worsened by Federal Reserve interest rate hikes.

Credit Card Delinquencies Surge to 10.7% in Q1 2024, Worrying Trend Across Age Groups

Credit card delinquencies surged to 10.7% in the first quarter of 2024 exceeding the peak seen during the pandemic’s early stages. This increase is led by individuals maxing out their credit lines indicating widespread financial strain, according to the report of Daily Caller.

Joelle Scally from the New York Fed highlighted a worrying trend delinquency rates are rising across all age groups, signaling worsening financial distress for many households.

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(photo: MD|DC Credit Union Association)

Delinquency Rates Temporarily Dropped Amid Stimulus Checks, but Reverse as Debt Surges

Initially, delinquency rates rose sharply at the onset of the pandemic but temporarily dropped as Americans received stimulus checks and saved money during lockdowns. However, recent data shows a reversal of this trend.

While credit card balances decreased slightly overall debt among Americans increased driven mainly by a surge in mortgage debt.

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Rising inflation, with prices up 18.9% since President Biden took office has led the Federal Reserve to raise interest rates. Unfortunately, this exacerbates the challenges faced by credit card holders likely leading to greater financial difficulties ahead.