Credit Card Balances And Household Debt Slowly Return To Pre-Pandemic Levels
Summary
The largest component of household debt are mortgage balances, which rose by $230 billion and stood at $10.67 trillion at the end of September. At the same time, as pandemic restrictions are lifted and consumption normalizes, credit card usage and balances are resuming their pre-pandemic trends, although from lower levels.” Typically, credit cards follow a seasonal pattern in which balances show a modest increase in the second and third quarters followed by a substantial increase in the fourth quarter due to Holiday spending. The report also noted that aggregate delinquency rates across all debt products declined and have remained quite low since the beginning of the pandemic. The transition from mortgages to delinquency increased slightly to 0.41% from the second quarter record low as forbearance options are no longer widely available. Median credit scores for mortgages and auto loans declined slightly in the third quarter, but still remain high by historical standards, researchers said.