The latest Quarterly Report on Household Debt and Credit from the New York Fed’s Centre for Microeconomic Data sheds light on key trends in household debt and credit card utilisation, offering valuable insights into consumer financial behaviour and potential risks.
Key Findings:
Implications and Conclusion:
The data suggest that credit card delinquencies are likely to continue rising if current trends persist, especially among maxed-out borrowers. Positive improvements in delinquency rates would require a decline in the transition rates among maxed-out borrowers or a reduction in their share. However, macroeconomic conditions can influence these trends, and monitoring will be crucial in understanding future developments.
Overall, the report emphasises the importance of credit card utilisation rates as a predictor of delinquencies and highlights the need for proactive measures to address financial vulnerabilities among borrowers, particularly those with high credit utilisation.