By the numbers: Credit card delinquencies for high-income consumers are ticking up.
But these rates are still well below average.
Why this matters: Higher-income consumers have so far been a bulwark of financial health. They haven’t felt the brunt of inflation as acutely as lower-income consumers. But this delinquency trend shows that they are feeling financial strain as well.
A few factors may be contributing to this:
The bigger picture: Holiday shopping could worsen this trend. More than one-fourth (27%) of US consumers plan to take on debt to get through the holiday season, per a Bankrate survey.
This may lead to a buildup of credit card balances that can be hard to pay down given record-high credit card interest rates.
Our take: While credit card debt and delinquencies may continue to grow for higher-income consumers as a result of the holiday season, this trend shouldn’t worry credit card issuers just yet. Even if they rise, delinquencies for this segment will still be well below the average.
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