Credit card debt carries a hefty bill in America, and falling behind on payments can be extremely costly for cardholders.
This graphic shows credit card delinquency rates across 50 U.S. states, as of Q3 2023. This data comes from a WalletHub study published in January 2024.
Credit card delinquency is when a cardholder falls behind on required monthly payments. Credit agencies are often notified after two months of delinquent payments.
WalletHub examined proprietary user data on the average number of delinquent credit card tradelines—also known as credit accounts—across states.
Yeah all banks in USA have very little reserve requirement. And we have debt based money. Soon as you use that credit card it instantly becomes an asset to the bank because it’s dollars you owe them. It becomes your liability because you must pay it back.
The interest rates on credit cards are so high because they have a higher chance of default. To make sure the bank doesn’t lose on these short term loans they make the rates extremely high.
Since Americans love to consume and we get ads in our faces everywhere we go people who have poor impulse control get suckered in.
thanks ! I assumed the reserve requirement was zero, but maybe it's different for credit.
The annual indexation of these amounts is required notwithstanding the Board's action in March 2020 of setting all reserve requirement ratios to zero. The reserve requirement exemption amount for 2023 will remain $36.1 million, unchanged for 2024, consistent with the Federal Reserve Act (the “Act”).
Is it a huge money maker? I would have guessed so but it seems like a lot of these delinquencies end up settling for pennies on the dollar, so I'm curious how the profit margins works out in the end.
I didn't do the average, but I assume you did and it came out to 20%. If that's the case, I would say that 1 in 5 Americans who use credit cards "default". You point out an interesting fact, and it also seems high to me, but what caught my attention was that there is more "default" in the south. Do you have any idea why that might be?
These are legitimate and pertinent questions. When I tried to search for information about the data, I got this message, which is not true. I only tried to access it once. Could it be the stackers? Try accessing the site to see if it works for you.
Wonder how bad this gets, they're already talking about no rate cuts this year so more people will be falling under the weight of servicing that 20% interest rate
Credit card interest rates are the most expensive bank credit available .. obscenely expensive .. things are getting really bad especially in those states where 25%+ of credit card holders aren't making minimum payments
Most people are asleep and clueless. There is no particular demographic to the sleeping humanoid. We don't need to fix other people, anyway. We only need to own our actions and take care that we do the right thing.
This is news to me, I had no idea that it worked that way in the US. As far as I know, it doesn't exist here in Europe and it was simply unthinkable, it's not even a topic of discussion.
The U.S., however, isn't the only country that has a credit scoring system. Here's how some other countries around the globe measure credit: