1 in 5 Americans is maxed out on their credit cards as nest eggs crack

Reusable plastic… is getting a lot of use. Years of climbing prices and high rates have Americans increasingly relying on their credit cards. That’s not inherently bad, but one person’s travel miles are another person’s high-interest debt. A New York Fed report this week said that nearly one in five US cardholders is using at least 90% of their credit limit (aka “maxed out”). That’s far above the 30% rate experts recommend, and it's leading to more past-due bills: about 9% of card balances fell into delinquency last year. “Serious delinquencies” (90+ days late) hit their highest level since 2010.

• Age gap: Young people are more likely to max out their cards because of lower credit limits, student loans, and smaller paychecks. 15% of Gen Z is maxed out, compared to 12% of millennials and fewer than 5% of boomers.

• Imbalance: About 44% of borrowers roll their credit debt over month to month instead of paying in full. Making minimum payments at 20% interest would take 18 years to pay off the average balance of $6.2K.

• Fee’d up: Last week, a federal judge blocked a Biden-admin rule that would’ve capped credit-card late fees at $8 (some are as high as $30).

The tab runneth upward… Total US household debt rose by $184B last quarter, to $17.7T, as more price-pinched folks fell behind on bills. Delinquencies rose on both mortgages and car loans (by 40% and 19%, respectively). And other payment options like buy now, pay later (for example: Affirm, Klarna, Afterpay) are said to be adding to the debt burden: Bloomberg said 43% of BNPL users were behind on their IOUs.