Rising Credit Card, Auto, Mortgage Delinquencies Highlight Strained American Economy
Delinquencies peak following pandemic-era stimulus end, with household debt reaching $1 trillion for the first time and hitting record highs on auto and credit card payments amid rising interest rates and depleting savings.
- Americans are finding it increasingly challenging to pay their debts as interest payments rise and savings decrease; this has been influenced by a string of rate hikes by the Federal Reserve.
- Credit card, mortgage, and auto payment delinquencies have all risen as household savings, which initially benefited from pandemic-era stimulus, have dropped.
- Subprime borrowers increasingly struggle to repay auto loans, with delinquency reaching 6.1% in September according to Fitch Ratings.
- Credit card debt and revolving loan balances surpassed $1 trillion in August, with outstanding bank card balances increasing by 18.1% from last year to $851.4 billion.
- While delinquencies are rising, some economists believe this is a signs of the economy re-normalizing post-pandemic rather than a harbinger of an economic downturn.
The Hill 
CBS News 
