. The rate of new credit card delinquencies hit 7.2% in the second quarter, up from 6.5% in the first quarter, according to the Moody’s report, which was based on household debt data published earlier this week by the New York Federal Reserve. That closely watched rate measures the percentage of loans that became 30 or more days delinquent. This metric is now ahead of where it was in the second quarter of 2019, before the Covid-19 pandemic rocked the economy.
Still, the findings suggest that more consumers are struggling to keep up with high prices as they plow through savings built up over the past three years. Moody’s warns that new credit card and auto loan delinquencies will both continue “rising materially,” peaking in 2024 at between 9% and 10%, compared with 7% pre-Covid. That forecast is based on an assumption that the historically low unemployment rate peaks at around 5% as the economy slips into a “mild” recession.
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