Credit card delinquencies increased by more than 50% in 2023

  • 6 months ago
TheStreet’s J.D. Durkin brings you the biggest news of the day, including how the market fared and why credit card delinquencies are on the rise.
Transcript
00:00 I'm JD Durkin reporting from the floor of the New York Stock Exchange.
00:03 Stocks were in the green to close out today's session.
00:06 The Dow closed up 156 points.
00:08 The tech-heavy Nasdaq closed nearly a full percent higher, while the S&P 500 closed eight-tenths
00:13 of a percent higher after hitting a fresh record high during intraday trading.
00:18 This all comes as investors continue to react to corporate earnings reports.
00:22 So far, over half of the companies in the S&P 500 have released results, with the majority
00:27 reporting better-than-expected results.
00:30 Wall Street's also reacting to comments from various Fed officials, saying that interest
00:34 rate cuts would likely come later on this year.
00:37 Markets are currently pricing in an 18 percent chance that the Fed cuts interest rates when
00:41 it meets in March.
00:43 In other news, credit card delinquencies are increasing at a staggering pace.
00:47 According to the Federal Reserve Bank of New York, missed payments increased by more than
00:51 50 percent in 2023, and total consumer debt rose to $17.5 trillion.
00:58 In the fourth quarter of last year, credit card debt in serious delinquency, or debt
01:02 that's 90 days or more past due, rose to 59 percent year-over-year, totaling $1.13 trillion.
01:11 Mortgage and auto loan delinquencies also rose in the fourth quarter.
01:15 According to the New York Fed, "Credit card and auto loan transitions into delinquency
01:19 are still rising above pre-pandemic levels.
01:22 The signals increase financial stress, especially among younger and lower-income households."
01:27 A big factor in the increasing debt is the interest rate charged by credit card companies.
01:33 Since the Fed began its tightening in February of 2022, rates have shot up from 14.5 percent
01:39 to around 21.5 percent.
01:41 However, student loan delinquency saw a decrease in Q4.
01:46 The Biden administration has made it a priority to cancel student loan debt.
01:50 And the White House has forgiven more than $136 billion since Joe Biden took office.
01:56 That'll do it for your daily briefing.
01:58 From the floor of the New York Stock Exchange, I'm J.D. Durkin with The Street.
02:01 Thanks for watching.
02:02 [BLANK_AUDIO]

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