NEW YORK — Consumers are increasingly struggling to pay their credit card bills, raising concerns about severe delinquencies spiraling and sapping consumer spending.
The share of credit card debt that’s more than 90 days overdue rose to 10.7% during the first quarter, a 12-year high, according to the Federal Reserve Bank of New York’s report on first-quarter household debt.
Borrowers in their 20s and 30s are having the most difficulty paying their credit card bills, with many on the verge of severe delinquency.
A year ago severe delinquencies totaled only 8.2% of credit card debt. The first-quarter jump in severe delinquencies was the biggest since 2012. Meanwhile total credit card debt rose to $1.12 trillion from just under $1 trillion a year ago.
Those in their 20s and 30s are having the most difficulty paying their credit card bills. Those age groups typically have a mix of less earnings power and lower savings.
The Federal Reserve hiked its key interest rate rate to a 23-year high to combat four-decade high inflation, which peaked in June, 2022 at 9.1%. Those rate increases made borrowing more expensive on mortgages, auto loans and credit cards.
