Credit card defaults in the United States are at their highest level since 2010, according to a report released Sunday.
The default rates suggest Americans' income cannot keep pace with their spending and bill paying – amid high interest rates and post-pandemic inflation that remains above the targeted 2%.
Card lenders wrote off $46 billion in seriously delinquent loans in the first nine months of this year, a 50% increase over 2023, according to The Financial Times, which published the analysis, citing industry data compiled by BankRegData.
The numbers are the highest in 14 years, the report also states.
Lenders write off delinquent debt, often at 120 days past due, when they conclude the borrower won't or cannot pay off what is owed.
Mark Zandi, the head of Moody’s Analytics, says high-income households are OK, "but the bottom third of U.S. consumers are tapped out. Their savings rate right now is zero.”
