PHILADELPHIA–Spending last year by many consumers was in excess of their ability to repay, according to new research, which shows late credit card payments reached record highs at the end of last year.

According to data from the Federal Reserve Bank of Philadelphia, the percentage of credit card accounts getting just the minimum monthly payment is also at a record high.

Andy Kish of the Philadelphia Fed, which started tracking the related data in 2012, said in a statement that long-term and short-term factors are combining to set the records. 

He acknowledged the year-end 2024 data does reflect “seasonal” spending from the holidays which boosts card delinquencies.

But longer term, he said, both card delinquency rates and the share of accounts paying just the minimum payment has been rising over the past four years from pandemic lows, “so this has been a slow-building trend.”

Another Factor at Work

There’s a big factor at work.

“People are now using their credit cards for everyday expenses,” Chip Lupo, an analyst with WalletHub, told Marketplace.org. “When the everyday expenses collide with the unexpected expenses, and you’re running up those balances, and you’re unable to even make the minimum payment.”  

Lupo further told the publication that most consumers don’t actually pay attention to the interest rates on their cards or know how bad missing payments can be for their credit rating.