Credit card delinquency rate reaches record levels

Data from the Philadelphia Federal Reserve indicated that "all stages of account-based delinquency reached series highs," including those with more than 30 and 60 days of late payments.

Data from the Philadelphia Federal Reserve makes clear that credit card delinquency rates worsened to "series highs." A new report exposes that "more credit card accounts were 30+ and 60+ days past due in Q4 2023 compared with any other quarter since 2012."

All stages of credit account-based delinquencies reached series highs ... As credit performance deteriorated, the median origination credit limit decreased for a second consecutive quarter. ... Credit card performance further deteriorated at the end of 2023, with firms recording the worst 30+, 60+, and 90+ account-based days past due levels in the reporting series. 

According to the report, "credit card data are largely reflective of the total U.S. credit card market, representing roughly four-fifths of total U.S. bank card balances."

Record number of cards used

While delinquency levels were rising, there was also a record number of "card utilization." In other words, Americans were forced to resort to their cards to pay for their expenses. As a result, credit limits increased considerably.

Card utilization also rose, as is typical at year-end, and consumers with stretched credit lines drew further on those lines. Credit limits increased for more consumers than in the third quarter, especially for those with already-high credit limits.

The study also indicated that mortgage originations were the lowest in the series. "Originated mortgages hint at a possible change in the risk approach of firms. While credit scores remain steady, median original front-end debt-to-income and loan-to-value are elevated compared with fourth quarter 2021 levels."