The Broad, Continuing Rise in U.S. Credit Card Debt Delinquency

In August 2023, a Regional Economist article described a recent rise in credit card debt delinquencies. In this blog post, we highlight that the increase in U.S. credit card delinquencies has continued. While the incidence varies, rising delinquency is pervasive across geographies and different metrics.

We base our analysis on quarterly data from the Federal Reserve Bank of New York’s Equifax Consumer Credit Panel. A credit card account is delinquent if payments are 30 days or more late. We look at two variables—the percentage of people in delinquency and the percentage of debt in delinquency—from the first quarter of 1999 through the first quarter of 2024, a 25-year period, for those ages 20 to 64. In addition, we divide U.S. ZIP codes into deciles based on per capita aggregate gross income in 2019, derived from IRS individual income tax data. To better understand the broadness of the surge in credit card delinquency, we display data for the U.S., the Federal Reserve's Eighth District, the richest 10% of ZIP codes and the poorest 10% of ZIP codes.

The Growing Share of Individuals in Credit Card Delinquency

The figure below depicts the percentage of people in delinquency. This is an important statistic because it describes the share of the population that is struggling to repay its debt. Delinquency rates are plotted on a logarithmic scale, which makes it easier to compare how they have changed over time despite differences in level.

It is worth noting that delinquency in the populations we examined showed an increase for the last eight to 11 quarters. Although widespread, the increase is more notable in the poorest ZIP codes, where delinquency grew from 11% in the second quarter of 2021 to 17.4% in the first quarter of 2024—58% in relative terms. Furthermore, in the first quarter of 2024, the U.S., Eighth District and poorest 10% of ZIP codes were at 94.8%, 93.7% and 93.6% of their peaks, respectively, for the period we examined.

The Percentage of People with Delinquent Credit Card Debt Continues to Rise

SOURCES: Federal Reserve Bank of New York/Equifax Consumer Credit Panel and authors’ calculations.

NOTE: Delinquency is defined as credit card debt that is 30 days or more past due.

The Increasing Percentage of Credit Card Debt in Delinquency

The following figure shows the percentage of U.S. credit card debt in delinquency. This statistic is most commonly used to describe the incidence on lenders’ balance sheets. This variable grew in every region we examined for the last three to seven quarters. And for each region, the percentage of debt in delinquency has increased at least 32.2% in relative terms since its last trough. The richest 10% of ZIP codes have experienced the greatest proportional increase; their delinquency rate climbed from 4.8% in the second quarter of 2022 to 7.4% in the first quarter of 2024, or 54% in relative terms. For the poorest 10% of ZIP codes, the delinquency rate increased from 14.9% in the third quarter of 2022 to 21% in the first quarter of 2024, or 41% in relative terms.

The Percentage of Credit Card Debt That Is Delinquent Continues Climbing

SOURCES: Federal Reserve Bank of New York/Equifax Consumer Credit Panel and authors’ calculations.

NOTE: Delinquency is defined as credit card debt that is 30 days or more past due.

What’s behind this trend of rising credit card delinquency? One likely explanation is that delinquency rates are returning to historically more normal levels following extraordinarily low numbers during the COVID-19 pandemic, probably caused by temporary assistance programs.

However, present levels of credit card delinquency are greater than pre-pandemic levels, suggesting that a trend which began prior to the pandemic has accelerated. How much of this increase can be attributed to higher interest rates and tighter monetary policy? How long will it take for deterioration in household financial conditions to impact consumption? Examining these questions is part of our ongoing research.