More Americans Failing to Make Payments on Cards, Auto Loans

NEW YORK—More Americans are failing to make payments on their credit cards and auto loans, according to a new report.

New credit card and auto loan delinquencies have now surpassed pre-COVID levels, according to a report issued by Moody’s Investors Service.

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, CNN Business said.

“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,” CNN Business stated.

Also Above Pre-COVID Levels

The rate of new auto loan delinquencies is also on the rise, hitting 7.3% in the second quarter, compared with 6.9% in the first quarter. That’s also above pre-COVID levels, the report added.

However, auto loan and credit card delinquencies remain well below Great Recession levels, CNN Business noted.

“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,” CNN Business said.

The good news from the Moody’s report is that fewer Americans are falling behind on their mortgage payments, CNN Business added.

CUToday