Credit Card Delinquency Gap Widens After 2022 as 2020-22 Low-Income Borrowers Fall Behind
Updated
Updated · Liberty Street Economics - · Nov 10
Credit Card Delinquency Gap Widens After 2022 as 2020-22 Low-Income Borrowers Fall Behind
3 articles · Updated · Liberty Street Economics - · Nov 10
Summary
New York Fed data show credit card delinquencies climbed sharply from 2022 to 2024, with borrowers in lower-income neighborhoods posting the steepest deterioration and rates now above pre-pandemic levels across all income groups.
Nearly 2 percentage points more new cards and credit limits went to the lowest-income zip-code quartile during 2020-22, when lenders also issued cards to weaker borrowers as median origination scores fell to 688 from 699 in 2017-19.
The 2020-22 card vintage then drove a large share of balances turning 90-plus days delinquent in 2023 and 2024, while older pre-2017 accounts contributed less as they aged.
The broader household-debt backdrop remained heavy: total nominal balances rose $334 billion, or 1.8%, in the third quarter of 2026, even as serious-delinquency transitions outside housing were largely unchanged.
The New York Fed said the pandemic-era effect is now fading, and absent a macroeconomic shock, newer card vintages with better credit quality than 2020-22 should help delinquency trends improve.