Another 12-Year High for Credit Card Charge-offs and Delinquencies Federal Reserve Releases Q1 Data

Editor's NoteThis article was authored by Provest's Head of Credit Collections Business Development and Client Relations, Joel Rosenthaland has been republished here with permission. ProVest content—and all insideARM articles—are protected by copyright. All rights are reserved.

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Credit card charge-offs and credit card loan delinquencies continue to be at a 12-year high, according to the Federal Reserve’s first-quarter report. There are clues in the FED’s quarterly data indicating future account volume. 

First quarter 2024 data reveals that credit card charge-offs increased from 4.01% to 4.20%. The recent quarter’s curve may be flattening out, but it is still growing at a rate that does not appear to be topping out as of yet.

Credit card loan delinquencies, an early indicator of charge-offs, increased from 2.95% to 3.01%. For the second consecutive quarter, the curve is flattening, which suggests that we are approaching a period of more gradual increases or possibly peaking.

In ProVest’s experience, there is generally a 9-12-month lag from when the charge-offs occur before our litigation clients see the volume. Considering that both charge-offs and delinquencies have continued to increase, it suggests a surging volume well into 2025. It’s important to ensure you have the capacity to handle and process the ever-increasing volume. 

The Federal Reserve’s charts for the data referenced follow and are linked. 

 Charge-off Rate on Credit Card Loans

Delinquency Rate on Credit Card Loans