[Photo Credit: by Gage Skidmore]

New Report Shows Credit Card Delinquencies are Surging Under Biden

According to research conducted by the New York Federal Reserve, credit card delinquencies are increasing, with nearly one-fifth of debtors being “maxed out.”

The bank’s Center for Microeconomic Data reported in a new report that household debt increased by $184 billion, or 1.1 percent, in the first quarter of the year, bringing the total to $17.69 trillion.

Consistent with preceding quarters, the aggregate credit card utilization rate across the nation was determined to be 23 percent in the initial quarter.

However, a more thorough examination of the data hidaways some significant variations in utilization rates.

“Delinquency transition rates increased for all debt types. Annualized, approximately 8.9% of credit card balances and 7.9% of auto loans transitioned into delinquency. Delinquency transition rates for mortgages increased by 0.3 percentage points yet remain low by historic standards.” a release explaining the report stated.

The report revealed that prior to the onset of the coronavirus pandemic, the annual delinquency rate for the balances associated with those borrowers was less than one-fourth.

In contrast, roughly one-third of the balances became delinquent in the previous year.

Also found to be more likely to have their credit limits reached were younger consumers and cardholders who resided in low-income areas.

According to the research, aggregate delinquency rates increased in the first quarter, reaching 3.2% of outstanding debt in some stage of delinquency as of March’s end.

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