NEW YORK—As credit card debt hit an all-time high of just shy of $1 trillion in the final three months of 2022, delinquencies among borrowers also accelerated.
Balances grew $61 billion in the fourth quarter from the previous one to $986 billion, the Federal Reserve Bank of New York found. That marked the largest quarterly increase and the highest total since the series began in 1999, Yahoo Finance reported.
At the same time, the rate at which credit card holders missed payments and became more than 90 days behind was higher than before the pandemic, especially among younger borrowers, a potentially worrying sign when the student loan pause lifts later this year, Yahoo Finance stated in its analysis.
“Although historically low unemployment has kept consumer's financial footing generally strong, stubbornly high prices and climbing interest rates may be testing some borrowers' ability to repay their debts," Wilbert van der Klaauw, an economic research advisor at the New York Fed, said in a statement to Yahoo Finance.
Highest Annual Gain
The $130 billion year-over-year increase in credit card debt, also the highest annual gain on record per the New York Fed, came as interest rates on credit cards also hit new highs.
The average rate is near 20%, according to Bankrate, surpassing levels from the last 37 years, Yahoo Finance noted.
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