Delinquencies are up, and spoiler alert: it’s not because people are buying more lattes. The pandemic triggered a surge in new and existing debts, with spending spiking after stay-at-home restrictions ended. Now, with post-pandemic spending fading and essential costs climbing, many are relying on credit for daily expenses. As a result, Americans are falling behind on credit card payments at levels not seen since the aftermath of the 2008 recession.

• US credit card debt has reached a new peak at $1.14T, with 7.18% of these balances overdue by more than 90 days — the highest rate in 13 years.
• Across generations, 23% of Gen X are focusing on reducing their debt, followed by 22% of baby boomers and 20% of millennials.

Savings squeeze: Overall delinquency rates are steady at 3.2%, but this rise suggests potential troubles are brewing with consumer debt. Despite consumer spending bolstering recovery post-pandemic, Americans’ savings dropped to 3.4% of after-tax income in June, down from 4.8% a year earlier. However, while Americans have been tightening their belts, economist Mark Vitner remains optimistic, stating to MarketWatch, “There are a few cracks there… (but) from an overall basis, consumers look to be in pretty good shape.”