Credit card and auto loan delinquencies are the highest in more than a decade

During the fourth quarter, US household debt hit a fresh high of $17.5 trillion, up 1.2% from the three months before, according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit released Tuesday.

Debt balances increased across the board, with credit card balances rising $50 billion to hit a new nominal high of $1.13 trillion (when adjusting for inflation, balances have yet to surpass the levels seen in 2008).

While rising debt levels shouldn’t come as a surprise — especially when the holiday season typically correlates to heftier credit card balances — New York Fed researchers say they’re keeping a close eye on the extent to which Americans are becoming overextended.

“Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels,” Wilbert van der Klaauw, economic research adviser at the New York Fed, said in a statement. “This signals increased financial stress, especially among younger and lower-income households.”

During the fourth quarter, an annualized 8.52% of credit card balances and 7.69% of auto loan balances became delinquent, marking the highest annualized rates since the second quarter of 2011 and the fourth quarter of 2010, New York Fed data shows.

This story is developing and will be updated.

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