Overdue card debt sinks to a decade low

Sabrina Karl
Personal Finance Writer
Data whiz and visual storyteller


Americans’ climbing credit card debt is quickly approaching levels seen at the end of the Great Recession. But while that may sound ominous, today’s card debt looks different than it did six or eight years ago, and is actually a promising sign for the economy.

Newly released data from the Federal Reserve Bank of New York shows that outstanding U.S. card debt has increased for a 16th consecutive quarter and totaled $779 billion at the end of 2016. That’s up 4.3 percent over the third quarter and 6.3 percent over 2015, and is the highest figure the bank has reported since 2009.

What’s different is that consumers are handling their card balances notably better. As a result of the credit run-up during the 2008-2009 financial crisis, the rate of serious delinquency reached a peak 13.3 percent in 2010. That means for every $8 in card debt, more than $1 was overdue for payment by at least 90 days.

Fast forward six years, and today, the seriously delinquent balance has sunk to its lowest level in over a decade, down to just 7.1 percent, or $1 overdue for every $14 in outstanding debt.

The share of their credit limit that Americans are using has also shrunk. Outstanding balances in 2009 represented 28 percent of consumers’ available credit. Today that credit utilization figure has dropped to just 23 percent, meaning consumers are using a lower proportion of what’s been offered to them.

The increase in debt balances is not unique to credit cards, though. Mortgage balances were up 2.8 percent over last year, student loans 6.3 percent and auto loans a strong 8.7 percent. Only home equity lines of credit (HELOCs) saw balances decline from 2015 to 2016, at minus 2.9 percent.

The Federal Reserve Bank of New York releases its Household Debt and Credit Report every quarter. Its findings are based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymous Equifax credit data. Its latest report was released Feb. 16.

See related: Americans' credit card debt hits $1 trillion, More infographics

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Updated: 11-23-2017