Rising Credit Card Debt and Tightened Standards: A Warning for Consumers
Credit card data from last month reveals a decline in credit quality, with the average delinquency rate slightly below pre-pandemic levels and the average charge-off rate surpassing 2019 levels. The total credit card loans at eight lenders have increased by 12% compared to last year, but some lenders, including JPMorgan Chase, Citigroup, Bank of America, and Bread, have seen balances decrease. Analysts suggest that higher net charge-offs may be linked to student loan repayment resumptions and ongoing inflationary pressures. The rise in credit card delinquency rates is widespread, particularly among millennials and those with auto or student loans. As consumers face rising prices and reduced income, they are increasingly relying on credit cards to manage their finances.