2023-08-08 12:12:38 ET
U.S. consumers' credit card balances topped $1T in Q2 as consumers continued to spend, according to the New York Fed's Quarterly Report on Household Debt and Credit released on Tuesday. The total amount of household debt ticked up by 0.1% to $17.06T.
During the April through June period, credit card balances rose 4.6% to $1.03T, the highest level since the New York Fed started collecting the data in 2003. The number of credit card accounts increased by 5.48M to 578.35M. And the total limits on credit card accounts edged by $9B to $4.6T.
Along with the rise in balances, the flow into serious delinquency (that is, 90 days or more delinquent) for credit cards rose to 5.08% of total credit card balances in Q2 from 3.35% in Q1.
The higher delinquency rate is more in line with pre-pandemic levels. During the pandemic, changes in buying patterns, fiscal stimulus, and forbearance programs kept delinquency rates low.
"Credit card balances saw brisk growth in the second quarter,” said Joelle Scally, regional economic principal within the Household and Public Policy Research Division at the New York Fed. “And while delinquency rates have edged up, they appear to have normalized to pre-pandemic levels."
For other kinds of debt, mortgage balances were roughly flat at $12.01T, auto balances rose by $20B to $1.58T, and student debt fell by $35B to $1.57T, according to the report.
Credit card stocks to keep an eye on include: Bread Financial ( NYSE: BFH ), dropping 1.8% on Tuesday, Synchrony Financial ( NYSE: SYF ) -1.2% , Capital One Financial ( NYSE: COF ) -1.6% , Discover Financial ( NYSE: DFS ) +0.3% , and American Express ( NYSE: AXP ) -1.5% . Credit card issuers will report their July delinquency and net charge-off rates next week.
More on Credit Card Debt:
- American Express: A Terrific Stock to Put in the Wallet
- Credit card delinquencies tick up, net charge-offs fall in June
- Capital One Financial: Limited Upside (Rating Downgrade)
- Inside Amex, Capital One, Discover: Credit quality metrics back to normal
- U.S. credit card debt nears the $1T mark: Is there a reason to worry?
For further details see:
Credit card debt climbs 4.6%, topping $1T, in Q2; total household debt ticks up