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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.

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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."

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