Number of Americans behind on credit card payments nears 15-year high

The number of Americans falling seriously behind on their credit card payments has soared to a near 15-year high.

The share of credit card loan balances more than 90 days behind on repayment has hit 12.4pc, the highest level since 2011, according to figures from the Federal Reserve Bank of New York.

America’s credit card debt pile has soared by 76pc since the start of 2011 to total a record $1.23tn (£940bn).

The numbers show how poorer households are becoming overwhelmed by higher costs as Donald Trump scrambles to try to appease voters on the cost of living.

The new figure will also raise fears about the underlying state of the US economy. On Friday, a closely watched survey from the University of Michigan showed consumer sentiment fell sharply in November, with personal finance sentiment the lowest since 2009.

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Andrew Hollenhorst, chief US economist at Citi, said: “When you see delinquency levels [for credit cards] that are this high, what it’s really showing us is that there’s a large share of consumers in this economy who are struggling.

“Credit card debt typically has the highest interest rates of any kind of debt, which means that if borrowers are failing to pay off their loans then the costs will mount rapidly.

“There’s a concern for that segment of the population that we should be taking seriously.”

‘Household expenses crisis’

Mr Trump was elected on a campaign promise to bring down prices, a pledge that was key to his support from blue-collar workers. He is now being forced to acknowledge that the affordability crunch has only got worse.

Kenneth Mohammed, of American Consumer Credit Counseling (ACCC), which helps people who are struggling with credit card debt, said it was a “household expenses crisis”.

“We’re seeing, across the board, people complaining about the cost of food, the cost of cars, utilities, basic living expenses,” he said.

Mr Trump announced tariff exemptions on more than 200 food imports including beef, coffee and bananas earlier this month in a bid to bring down the price of groceries.

The move was a stark reversal from his previous insistence that his sweeping tariff policies would not trigger higher inflation.

He has also promised that he will use tariff income to pay $2,000 cheques “to low and middle income USA citizens”.

Jobs growth has stalled and the unemployment rate has climbed to 4.4pc, up from 4.1pc a year ago.

Christopher Waller, the Federal Reserve governor, last week warned of signs that lower income households are struggling to pay their mortgage and car loans. He said these issues would become “more acute” if the job market weakens further.

Justin Begley, economist at Moody’s Analytics, said: “If we do have a situation in which the labour market starts to meaningfully deteriorate and the unemployment rate spikes, and people are losing their jobs, then there could be a domino effect.

“If you start falling behind on one of your loan payments, it can spread to others. We’re waiting to see if that is what is going to happen.”

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