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US credit card defaults jump to highest level since 2010
Consumers are ‘tapped out’ after years of high inflation and as pandemic-era savings have evaporated
The sharp rise in defaults is a sign of how consumers’ personal finances are becoming increasingly stretched after years of high inflation, and as the Federal Reserve has left borrowing costs at elevated levels. Credit card lenders were happy to help, signing up customers who might not have qualified in the past based on income, but looked like safe debtors because their bank accounts were flush with cash. Credit card delinquency rates, which are seen as a precursor to write-offs, peaked in July, according to data from Moody’s, but have only fallen slightly and remain nearly a percentage point higher than they were on average in the year before the pandemic.
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