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Share of Credit Card Accounts Past Due Hits 12-Year High

A growing share of credit card accounts are past due on their payments.

The Federal Reserve Bank of Philadelphia said in a Wednesday (April 10) press release that the share of accounts that were 30-plus days and 60-plus days past due in the fourth quarter of 2023 was the highest since the bank began reporting this data in 2012.

“Stress among cardholders was further underscored in payment behavior, as the share of accounts making minimum payments rose 34 basis points to a series high from last quarter’s reading,” Philadelphia Fed said in a “Q4 2023 Insights Report” released Wednesday.

At the same time, the share of accounts making full balance payments rose 8 basis points during the quarter, per the report.

Nominal credit card balances also moved up and hit a new high in the fourth quarter, according to the report. When adjusted using the consumer price index, however, they remain below the levels seen in the fourth quarter of 2019.

“Real account balances are quickly approaching pre-pandemic heights, though, with the median real account balance increasing 5.4 percent year over year,” the report said.

When it comes to mortgages, originations in the fourth quarter declined to the lowest number seen since the series of reports began in 2012, according to the report. The report said “market headwinds continued to stifle overall mortgage demand.”

The report also noted changes in the underwriting practices of large banks. While origination credit scores remain close to those seen in the fourth quarter of 2021, the median front-end debt-to-income ratio rose to a series high, per the report. In addition, median origination loan size and loan-to-value have increased.

“Combined, the increases underscore continued affordability issues as housing costs consume a larger share of borrowers’ budgets,” the report said.

This report comes two days after the Federal Reserve Bank of New York said consumers are increasingly concerned about missing debt payments.

“The average perceived probability of missing a minimum debt payment over the next three months rose by 1.5% to 12.9%,” the New York Fed said. “This is the highest reading in four years since the onset of the COVID-19 pandemic.”