New York Fed Reports Highest Credit Card Delinquencies Since 2008

The Federal Reserve Bank of New York reported that credit-card delinquency measures have reached their highest levels since the 2008 financial crisis. Researchers found the spike is primarily driven by severely derogatory loans—debts deemed uncollectable by lenders—that remain on credit reports longer than in previous decades. Between 2004 and 2012, 40% of charged-off debts stayed on records after one year, but that figure doubled by 2024.

In its Quarterly Report on Household Debt and Credit, the bank noted that the share of overdue consumer loans declined slightly to 4.7% for the second quarter. While student loan delinquencies improved to 7.8%, new mortgage delinquencies hit their highest level since 2015. Total household debt fell to $18.8 trillion for the first time since 2020, though this is attributed to changes in mortgage services reporting rather than a fundamental debt decrease.

When stale balances are removed, the pace of new delinquencies appears to have stabilized after 2024, although rates remain elevated for low-income and younger borrowers. PNC Financial Services Group challenged these findings, arguing the metrics are misleading and incongruent with other stable credit performance trends. These financial pressures persist as households face high interest rates and inflation that remains above the central bank's target.