New York Fed: Credit Card Delinquency Spikes as Costs Soar Under Joe Biden

biden credit card
Chip Somodevilla, Kiwis/Getty Images

Families racked up credit card debt and went into delinquencies at an increased rate since the pandemic, the New York Fed found Tuesday.

Missing credit card payments arise from several factors, such as cash flow constraints and income loss during inflation. Costs soared on average about 20 percent under President Joe Biden.

The average Wisconsin family spent an extra $21,981 because of the increased cost of living under Biden, the Republican National Committee (RNC) estimated in May. A McDonald’s Big Mac burger, a medium beverage, and a medium fry meal cost $18 in some locations, up $10 from 2018 when former President Donald Trump was in office.

“For all debt outside of student loans, delinquency has been steadily rising since the fourth quarter of 2021 after historic lows during the COVID-19 pandemic,” The New York Fed reported on the delinquency trend. “Credit card delinquencies, in particular, have risen past pre-pandemic levels.”

About 120,000 Americans incurred a bankruptcy notation on their credit reports last quarter. About 4.8 percent of Americans had some debt in third-party collections.

U.S. family debt is up 25 percent in three years, the timeframe Biden’s inflation impacted families, which means American citizens are using debt to fight inflation, the Fed also found.

“The Fed researchers found younger borrowers and those with lower incomes are more apt to be financially stressed than older borrowers and those with higher incomes, who may have more credit available,” Bloomberg reported:

The Fed’s report showed 6.9% of credit card debt transitioned to serious delinquency last quarter, up from 4.6% a year ago. And for credit card holders aged 18–29, 9.9% of balances were in serious delinquency.

The biggest household debt holding is for housing. It accounts for more that 70% of the total. That debt is performing well, but homeowners are increasingly tapping their accumulated home equity in the form of a home equity loans.

Outstanding student loan debt was roughly unchanged and stood at $1.60 trillion. Its difficult to determine how much of that debt is delinquent as missed federal student loan payments will not be reported to credit bureaus until the fourth quarter.

A majority of voters (51 percent) believe their financial position is worse off under Biden’s economic policies, a Financial Times/Michigan Ross poll recently showed. The poll also found damaging results for Biden’s reelection chances:

  • Only 28 percent of voters said Biden’s economy helped their financial situation
  • Seventy-one percent said economic conditions are negative
  • Eighty percent said soaring prices are one of their biggest challenges

“The poll results, which come less than six months before November’s presidential election, suggest voters are still blaming Biden for high consumer prices such as those for petrol and food,” the Times analyzed.

Wendell Husebo is a political reporter with Breitbart News and a former GOP War Room Analyst. He is the author of Politics of Slave Morality. Follow Wendell on “X” @WendellHusebø or on Truth Social @WendellHusebo.

Authored by Wendell Husebø via Breitbart May 15th 2024