In a sign of the continued pressure of the paycheck-to-paycheck economy, more consumers are making only minimum payments on their credit cards.
And the debt on those cards is increasing.
It’s becoming increasingly difficult to strike a balance between staying in credit card debt and falling into delinquency, so to speak. Delinquency is increasing.
According to Q4 2023, accounts past due for more than 30 days and accounts past due for more than 60 days reached an 11-year high data from Federal Reserve Bank of Philadelphia It was released on Wednesday (April 10th). The percentage of accounts making full balance payments increased by 0.08% in the fourth quarter, little changed, while the percentage of accounts making only minimum payments increased by 0.34%.
According to PYMNTS Information data for December. credit card is owned by consumers who earn a salary, so their payment habits and behavior could be indicative of what we see across the credit spectrum, especially as inflation remains high. There is a gender.
“As usual at the end of the year, card usage increased, and consumers with tight credit lines tapped into them even more,” the Philadelphia Fed said in a report.
The Fed’s data for the fourth quarter is consistent with data from PYMNTS Intelligence, showing that 80% of consumers receiving a paycheck (about 60% of the general population) own a credit card, with an average of 2 cards. It was shown that it possesses 43% of consumers revolving their credit card balances at least some of the time, and 65% of distressed consumers revolving their credit card balances, up from 59% at the end of 2022.
Young consumers are feeling the pinch
Younger consumers are feeling the pinch the most, according to PYMNTS Intelligence. The percentage of Gen X consumers with revolving credit has increased by 7 percentage points since November 2022. According to measurements at the end of last year, this proportion reached more than his 54% of Gen X consumers, followed by 45% of Bridge Millennials, and almost 41%. % of Millennials. Almost one in three Gen X borrowers reached their credit limit in the past year.
With year-end pressures and balancing, PYMNTS reveals that more than one-third of consumers use credit products to manage their finances, and of those, 21% use credit products as their top strategy. Did.
PYMNTS Intelligence also found that 27% of consumers use a credit card when faced with an unexpected expense totaling $5,000 or more, and 21% use a credit card when their emergency expense is less than $1,000. I discovered.
Of course, the December data is more than three months old. The Fed announced last week that as of February, the total consumer debt It grew at an annual rate of 3.4%. Revolving credit usage increased by more than 10% each year.
The tightrope can fray.
