Seriously delinquent auto loans hit a record as card arrears near their 2010 peak

The New York Fed readings do not carry equal weight, and a plan that treats them as one trend will put its reserves in the wrong place. Mortgages are the mildest: arrears reached a six-year high but remain far below the Great Recession peak ^[3]. Autos and cards are the two at or near their worst recorded levels ^[1][2]. In our view those two are the portfolios to plan against first.

The household survey is the broadest of the readings. The move from about 12% of households late on a debt payment in 2022 to nearly 20% in 2025 is 8 percentage points ^[13]. The CBS account does not break the figures down by income, so how much of the rise sits with lower-income households is unknown.

The source sets this stress against a labor market that is holding: GDP growth and unemployment remain relatively solid ^[15]. Delinquency has risen anyway. Economists cited by CBS say wage growth is lagging inflation, so millions of households have lost purchasing power ^[17]. Kelly Regan, a certified financial planner at Girard, described credit cards as "kind of like the safety valve if you have no emergency savings left" ^[8]. She told CBS News: "We have an issue that if prices are increasing, especially more than people's wage growth, we're going to have a gap where things are going to cost more." ^[9]

Lenders and sellers face a trade-off. Tighter terms and firmer collections protect against losses in the books that sit at records. They also press on customers who, in a March Debt.com survey, were leaning on cards: more than half relied on them for basic needs such as groceries, rent and utilities ^[10], and almost six in 10 said inflation was giving them a bigger card balance than a year earlier ^[11]. Looser terms keep sales moving into a market where, Joanne Hsu, director of the University of Michigan Surveys of Consumers, said in a statement, "Frustration over cost of living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year." ^[12] The two surveys do not track the same households, so their figures cannot be added together.

This quarter's choice on terms and reserves sets the size of the delinquent book that next quarter's collections team inherits. Measured against 2022, the share of households late on a debt payment is now roughly two-thirds larger ^[14], and a plan sized to the older baseline understates the collections queue.