US Credit Card Arrears Climb as Consumers Feel Strain of High Rates

Signs of strain are building among US consumers as the proportion of credit card accounts in arrears has climbed markedly, reaching around 13% in the first quarter of 2026, according to analysis cited in the Bank of England's July Financial Stability Report. The report noted that the share of US consumer credit loans more than 90 days in arrears has increased significantly over the past three years, with credit card delinquencies rising particularly quickly. It offered some reassurance, however, observing that the share of accounts in arrears but not yet written off, a more relevant gauge of potential future losses for lenders, had levelled off at around 4% at the end of 2025, near its long-run average. The data point to the cumulative pressure on households from an extended period of elevated interest rates, even as headline measures of consumer spending have remained resilient and bank executives describe the American consumer as broadly healthy. Delinquency and charge-off rates on credit cards and auto loans are being closely watched as indicators of whether borrowers are reaching their limits. Rising arrears could eventually weigh on lending, consumer spending and the broader economy if the trend continues.