With high interest rates and a rising cost of living, a recent report from WalletHub compares data from the first and second quarters of 2025, revealing an uptick in credit card delinquencies across the U.S.
Why It Matters
A credit card delinquency happens when an account holder doesn’t make at least the minimum payment by the due date, typically resulting in an account being considered late after 30 days or more.
The study highlights which states are experiencing the fastest increases in delinquencies and which ones are managing to keep their rates lower.
Currently, U.S. households carry a staggering total debt of around $18.6 trillion, as reported by the New York Fed.
Key Takeaways
Minnesota leads the nation with a remarkable 32.88% rise in credit card delinquencies since the previous quarter, with about 19.17% of its accounts falling into this category in the second quarter. The state’s high debt levels seem to make families more susceptible to ongoing economic strains, particularly from persistent inflation and climbing interest rates.
Iowa follows closely behind, showing a 31.53% increase in delinquencies. Even though credit card debt in Iowa is relatively low, it appears that weak economic conditions are driving this rise, with around 14.36% of accounts past due.
Kansas takes the third spot, with a 30.22% jump in delinquencies from the last quarter. Despite having among the lowest levels of median credit card debt nationwide, it suggests that overall financial tightening might be more influential than high borrowing.
South Dakota ranks fourth, with a significant 29.92% increase in delinquent accounts, bringing the total to roughly 20.64%. The state’s limited economic base may leave consumers more vulnerable to rising living costs.
Ohio rounds out the top five states, reporting a 28.65% surge in delinquencies. With about 19.66% of its accounts considered delinquent, this reflects a larger trend influenced by increasing interest rates and only slight wage growth.
Conversely, some states saw only minimal increases in delinquency rates. Florida recorded the lowest at 14.79%, followed by Vermont at 16.57%, Wyoming at 16.93%, Alaska at 18.32%, and California at 18.52%. This slower growth may be due to stronger local economies, lower debt levels, or more resilient job markets.
Persistent inflation and escalating living costs are squeezing household budgets. Economic policies from the White House—like tariffs on imports—are aimed at supporting U.S. industry and enhancing domestic production. While some argue these measures will benefit the economy over time, others contend they contribute to higher consumer prices for everyday essentials.
What Others Think
WalletHub analyst Chip Lupo remarked, “Long-term delinquency on your credit cards can lead to a significant drop in your credit score, so it’s vital to get your account current as quickly as possible. Luckily, if you can update your account before 30 days pass, the delinquency won’t be reported to credit bureaus. If you’ve been late for a while, there are strategies you can consider to get back on track, such as hardship programs, budgeting, and consolidation.”
