As Obama's "recovery" rolls along, the Wall Street Journal points out that the delinquency rates of subprime credit cards has surged to the highest levels recorded since 2012. Moreover, per TransUnion data, delinquency rates on cards issued in 2015 are close to 3%, or roughly double the overall rate, indicating that consumers have grown increasingly dependent on credit cards over the past couple of years to fund daily expenses.
Credit-card lending to subprime borrowers is starting to backfire.
Missed payments on credit cards that lenders issued recently are higher than on older cards, according to new data from credit bureau TransUnion. Nearly 3% of outstanding balances on credit cards issued in 2015 were at least 90 days behind on payments six months after they were originated. That compares with 2.2% for cards that were given out in 2014 and 1.5% for cards in 2013.
The poorer performance on newer cards pushed up the 90-day or more delinquency rate for all credit cards to 1.53% on average nationwide in the third quarter. That’s the highest level since 2012.
Meanwhile, FRED data reveals that while overall credit card delinquency rates remain at 10-year lows, the trends has been higher over the past several quarters.
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