Credit card delinquency rising among young adults: Report
Misty Severi
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Credit card delinquency rates have risen for adults age 18-39, according to a new report from Moody’s Investors Service.
The delinquency rate rose to 8.3% for young adults ages 18-29, an increase of over 3% from last year when the rates were 5.1%, but it is still lower than before the pandemic. Among those aged 30-39, delinquency rates were 6.27%, which is higher than before the pandemic. But for adults over 40, delinquency was stable at or under 5%, according to Axios.
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Young borrowers also saw the fastest growth in credit card and auto loan balances last year, according to the Federal Reserve Bank of New York. Household credit card debt remained steady between the first quarter of 2023 and the fourth quarter of 2022, totaling $986 billion.
High inflation has already been making matters hard on people in the United States, particularly for younger borrowers who have less wealth and savings.
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“The tightening of lending standards will hit this particular cohort the hardest,” Claire Li, a senior analyst at Moody’s, told Axios.
The news also comes ahead of the return of student loan payment requirements, which the Biden administration has said will resume no later than the end of June. It would mark the first time graduates have had to make a payment on the loans if they graduated during or after the pandemic.