The percentage of credit card accounts at large banks that were past due by 90 days, or more, climbed to a 12-year high in the fourth quarter last year, according to the Federal Reserve Bank of Philadelphia.
Nonetheless, those delinquent borrowers made up less than one percent of card accounts in the data set. The Fed bank put 0.9% of credit accounts in that past-due category, based on its quarterly survey of credit card data.
That percentage is the highest figure the Philly Fed has recorded since it began issuing the quarterly report.
The fourth-quarter percentage of accounts that were 90 days past due last year was slightly higher than it was in the fourth quarter of 2023, when the figure increased to 0.89%, but two years earlier, in the fourth quarter of 2022, the percentage was only 0.7% of accounts, according to the Fed data.
Some higher-than-usual delinquency rates, in concert with consumers increasingly making just the minimum payment on their credit card bill every month, “indicate greater consumer stress,” the Philly Fed said in its report.
The report relies on data from U.S. banks, foreign banks doing business in the U.S., and savings and loan companies with at least $100 billion in assets.
Still, the Philly Fed’s fourth-quarter 2024 report showed 30-day and 60-day delinquencies, 1.86% and 1.29%, respectively, were slightly lower than the year-earlier quarter.
The report also showed more card holders making the minimum payment during the fourth quarter, as opposed to paying off the monthly balance or making more than the minimum payment. About 11% of active accounts made the minimum payment while 35% paid the balance in full and about 28% paid some portion over the minimum. The remaining 25% includes active accounts with a zero or negative balance, active accounts with missing payment or cycle ending balance information, active accounts that made no payments and those who made less than the minimum payment.
For the fourth quarter, 11.12% of active accounts were making only the minimum payment up, up from 10.65% in the year-earlier quarter and up from 9.91% in the fourth quarter of 2022.
Credit card balances collectively rose about 4% for the fourth quarter last year to $951.03 billion among accounts included in the data, up from $911.92 billion in the year-earlier quarter, the report said.
At the same time, large banks are increasing borrowing limits for credit card users, although much of those gains are on the highest end of the credit spectrum, the Philly Fed found. Credit limits in the 90th percentile rose $1,000 year-over-year, or about 5%, to $19,500 in the fourth quarter. Meanwhile, credit limits in the 50th percentile remained flat year-over-year at $5,000, which the Fed called a “contraction in real terms.”
