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Americans’ household debt levels, including credit card debt, rose to new all-time highs in the fourth quarter of 2024, according to a report by the Federal Reserve Bank of New York.
The report showed that overall household debt increased by $93 billion to $18.04 trillion at the end of 2024, an all-time high. Credit card balances rose by $45 billion from the prior quarter to reach $1.21 trillion at the end of December, which is also a record high.
Delinquency rates ticked higher by 0.1 percentage points from the prior quarter to 3.6% of outstanding debt in some stage of delinquency, with delinquency transition rates steady for nearly all types of debt except for credit cards – which had a small uptick in transitions from current to delinquent. Serious delinquency, defined as 90 or more days past due, moved higher for auto loans, credit cards and HELOC balances but was stable for mortgages.
The New York Fed noted that while the report shows Americans are generally faring well in terms of managing their household debt, there are signs that rising prices and elevated interest rates are causing issues for some auto loan borrowers.
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Americans’ household debt reached a new record in the last quarter of 2024. (Spencer Platt/Getty Images / Getty Images)
“Overall, consumers are in pretty good shape in terms of the household debt landscape, largely driven by stable balances and solid performance in mortgage loans,” the New York Fed’s economic researchers wrote in a post accompanying the report.
“However, for auto loans, higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers across the income and credit score spectrum,” they wrote. “The episode of rapidly rising car prices has had heterogeneous impacts on borrowers, who have shifted between used and new cars as well as between loans and leases.”
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Americans’ credit card debt reached an all-time high at the end of 2024. (iStock / iStock)
The decline in used car prices could strain some borrowers who bought a used car when prices were higher, potentially leaving them underwater on those loans, the New York Fed said.
“These shifts have put additional pressure on lower-income and lower-credit-score borrowers who may have had to opt for higher-price used cars over the last few years,” the researchers wrote.
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Serious delinquencies for mortgages ticked lower at the end of 2024. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
“Used car prices have since declined from the peak, potentially leaving some borrowers underwater on those vehicles and creating potential repayment challenges,” they added. “At the same time, the decline in auto prices could imply that the more recently originated vintages of auto loans may fare better as those loans age.”
The number of consumers who had a bankruptcy notation added to their credit record was 123,000 in the fourth quarter according to bank data, a decline from the third quarter.
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Consumers with a third-party collection noted on their credit record was “relatively stable” in the fourth quarter, the New York Fed said.
