Credit card delinquencies

via Titan Invest (visit here)

U.S. credit card delinquency rates were the highest on record in the fourth quarter of 2023, according to the Federal Reserve Bank of Philadelphia. 3.5% of card balances were at least 30 days late as of the end of December. The number of people making minimum payments also rose, pointing to distress among cardholders. While 25% of active accounts have a balance of over $2,000 for the first time, one third of users pay their balance in full every month, exhibiting contrasting behaviors from likely different brackets of earners.

Issuers have responded to the rise in delinquencies by lowering the credit limit on new accounts. The problem is a direct result of the higher cost of living for Americans, as the last few inflation prints illustrated stickier than expected inflation. The Fed is unwavering in its goal to lower inflation, and their hope is that higher rates will eventually slow spending and reduce inflationary pressures. A higher for longer environment will help regulate the economy and the credit card delinquencies are an unfortunate symptom of the Fed’s remedy for inflation.

I could see this information permeating into tenants lives and thus into ownerships lives as tenants may begin to struggle with payments, rent increases, higher utility costs or additional fees.

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