Credit card companies are racking up losses at the fastest pace in almost 30 years, outside of the Great Financial Crisis, per Goldman Sachs.
Americans are defaulting on their credit cards and auto loans at levels not seen since the financial crisis.
Increasing numbers of Americans are encountering difficulties in meeting their credit card and auto loan payments, which serves as another indicator of growing financial strain on consumers.
Credit card companies are racking up losses at the fastest pace in almost 30 years, outside of the Great Financial Crisis
9/28/2023
According to a report by Moody's Investors Service, new delinquencies for credit cards and auto loans have now exceeded the levels seen before the Covid-19 pandemic.
In the second quarter, the rate of new credit card delinquencies reached 7.2%, up from 6.5% in the first quarter. This rate, which measures loans that are 30 or more days overdue, is now higher than the second quarter of 2019, which was prior to the pandemic's economic impact.
Similarly, new auto loan delinquencies also increased, reaching 7.3% in the second quarter, compared to 6.9% in the first quarter. Both of these rates are surpassing pre-Covid levels.
However, it's important to note that auto loan and credit card delinquencies are still significantly below the levels experienced during the Great Recession.
The report suggests that more consumers are grappling with the challenges posed by elevated prices, and they are utilizing savings accumulated over the past few years.
Moody's projects that both new credit card and auto loan delinquencies will continue to rise significantly, peaking around 9% to 10% in 2024. This is compared to the 7% rate observed before the pandemic. This projection is contingent on an assumption that the historically low unemployment rate will peak at approximately 5%, leading to a "mild" recession.
The report does provide some positive news – fewer Americans are falling behind on their mortgage payments. While new residential mortgage delinquencies have slightly increased in the past year, they remain below pre-Covid levels. Moody's predicts that mortgage delinquencies won't return to pre-pandemic levels until 2024.
Read more: https://unusualwhales.com/news/new-credit-card-and-auto-loan-delinquencies-have-now-surpassed-pre-covid-levels
Trump has told Walmart, $WMT, to 'eat the tariffs' instead of raising prices
5/17/2025 11:59 PMMoody’s downgrades US credit rating to Aa1 from Aaa
5/17/2025 4:55 AMYouTube, GOOGL, viewers will start seeing ads after ‘peak’ moments in videos
5/16/2025 7:55 PMCEOs say that just a fraction of AI initiatives are actually delivering the return on investment they expected
5/16/2025 7:51 PM
Stay Updated
Subscribe to our newsletter for the latest financial insights and news.
+With Unusual Whales
Get the best broker for options trading and earn Unusual Whales discounted! in cash with an eligible account deposit at tastytrade. Get an Unusual Whales bonus when you deposit $2000. Offer expires 3/31/25. Certain restrictions, terms and conditions apply.
Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.