Americans are missing credit card payments at the highest rate in a decade

• As of September, US credit-card delinquency rates were at the highest rate in a decade.
• The Federal Reserve Bank of Philadelphia said 3.2% of card balances were at least 30 days past due.

Americans are having a harder time paying off their credit cards.

A report from the Federal Reserve Bank of Philadelphia found credit-card delinquency rates have surpassed pre-pandemic levels, with the share of balances 30 days past due hovering at the highest mark since late 2012.

In the second quarter of 2021, credit card delinquency rates were at historic lows. Those figures have steadily climbed since then, however, and the spending behavior reflects "greater consumer fragility," Philadelphia Fed economists said.

Total revolving credit card balances have also increased from pandemic lows, the economists said.

"Revolving balances as a share of the overall balance climbed from 65 percent in 2021 to 70 percent in the third quarter of 2023," the report states. "During the same period, the share of accounts making the full payment has moderated, driven by strong consumer spending and dwindling government support. While the share of full payment accounts declined, it remains high compared with pre-pandemic levels."

In response to the deterioration, the economists noted banks are granting fewer credit line increases, and reducing credit lines more frequently.

The Philadelphia Fed said roughly 10% of credit-card borrowers owed more than $5,000.

"The average American's budget doesn't have a whole lot of wiggle room, so when prices go up to the degree they have in recent years, it's a big deal," said LendingTree's chief credit analyst Matt Schulz.

A January 8 report from LendingTree found that in the largest 100 US metros, 29.6% of Americans were behind on at least one debt payment between July 1 and September 30, 2023. Just over 27% of consumers had payments delinquent by 90 days or more.

"Higher interest rates have a real impact on people's ability to pay," Schulz said. "The massive, constant rise in rates over the past two years has shrunk people's financial margin for error even further."