A report issued Tuesday by the Federal Reserve Bank of New York shows that credit card delinquency rates are rising, especially among young people, who are more likely to have credit card debt than a decade ago, according to The Wall Street Journal.
About 8.1 percent of credit card balances held by people between the ages of 18 and 29 were delinquent by 90 days or more in the first quarter of the year, the highest amount since the first quarter of 2011, WSJ reported.
Delinquency rates among older people also are rising, but at a lower rate.
Total household debt, which rose for 19th straight quarter, is now nearly $1 trillion above its previous peak, according to a release issued by the New York Fed about the report.
Interest rates on credit cards are also moving up, further squeezing borrowers, according to WSJ. Rates on credit card accounts where interest is charged hit 16.91 percent in the first quarter of the year, according to Fed data, the highest rate since at least 1994.
As of March 31, total household indebtedness was $13.67 trillion, a $124 billion (0.9 percent) increase from the fourth quarter of 2018, the report showed. Overall household debt is now 22.5 percent above the 2013, second-quarter trough.
All of that might translate into bad news for people looking to finance new boats, and could mean fewer young people are able to take out loans . In 2017, 95 percent of people who received boat loans were 45 or older, according to National Marine Lenders Association data issued in August.
The age of boat loan recipients increased substantially from 2016, when 30 percent of loans were made to people ages 35 to 44. In 2012, only 7 percent of loans were made to people younger than 45, according to the report.
Boat prices have increased substantially over the last decade; higher interest on borrowed money and increasing delinquencies could mean that when new NMLA data comes in, that gap might have widened further.
A recent Charles Schwab survey shows that almost two-thirds of millennials are living paycheck to paycheck, and only 38 percent feel financially stable, according to CNBC.
Millennials, more than any other generation surveyed by Schwab, feel the most insecure when it comes to finances. That’s according to roughly 380 millennials ages 23 to 38 surveyed for Schwab’s 2019 Modern Wealth report.
Millennials ranked social media as the No. 1 bad influence when it came to money management, according to the report. Almost half reported spending more money than they could afford to participate in the types of activities they see on friends’ feeds.