Credit card delinquencies are rising. Steps to take



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FILE – A variety of credit cards are shown on Jan. 18, 2024, in Atlanta. Seriously overdue credit card debt is at the highest level in 14 years, and people 35 and under are struggling more than other age groups to pay their bills. (AP Photo/Mike Stewart, File)

Seriously overdue credit card debt is at the highest level in more than a decade, and people 35 and under are struggling more than other age groups to pay their bills.

The share of credit card debt that’s severely delinquent, defined as being more than 90 days overdue, rose to 10.7% during the first quarter of 2024, according to the Federal Reserve Bank of New York. A year ago, just 8.2% of credit card debt was severely delinquent.

If you’re experiencing delinquency, or at risk of it, experts advise speaking with a nonprofit credit counselor and negotiating with your creditors directly. Here’s what you should know:

Anyone at risk of delinquency should reach out as soon as possible for help from a nonprofit credit counselor.

Most credit card companies and other lenders have hardship programs.

Contact credit card companies to negotiate interest rates, fees, and long-term payment plans

The most important thing a borrower can do is know their credit score and keep up with payments to avoid paying additional interest on revolving balances and debt.

The average annual interest rate on a new credit card is 24.71%, according to LendingTree, the highest since the company began tracking in 2019.

On top of increasing credit card delinquencies, retail spending stalled in April. Walmart has said its customers are spending more on necessities and less on discretionary goods. Starbucks lowered its sales expectations, and McDonald’s is offering more deals as people cut back.

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