On credit and late

In the US, total household debt balances grew 5.6% year-on-year during 2Q23, reaching USD 17.06 trillion. Notably, credit card debt rose 16.2% year-on-year reaching more than USD 1 trillion for the first time since the US Federal Reserve began tracking the data. While the employment market remains strong, and inflation is abating, consumers appear to be having increased difficulty affording payments on these growing credit balances. Although consumers in total remain current on outstanding debt balances, the flow of accounts into delinquency has begun to rise. Fed data also shows that delinquency rates are rising more among younger and lower income consumers. This trend will likely accelerate as student loan deferral programs end over the next two months. Adding to the pressure are the exceptionally high interest rates on credits which stand at 20.7%, according to Lending Tree. 

Source: US Federal Reserve Bank of New York, August 2023