California Faces Surge in Credit Card Delinquencies Amid High Inflation and Interest Rates
- A report by WalletHub reveals that Chula Vista, California, has the highest rising rates of credit card delinquencies.
- This trend raises concerns about personal finance management in the area, especially given its proximity to San Diego.
- Experts suggest increased financial education and support to address and mitigate this escalating issue.
A significant rise in credit card delinquencies is affecting many Californians as they grapple with elevated interest rates and persistent inflation. According to a recent report by WalletHub, several cities in California are at the forefront of this trend, with Chula Vista experiencing the most dramatic increase. The San Diego suburb saw credit card delinquencies soar nearly 85% in the first quarter of 2024 compared to the previous year, surpassing cities like Madison, Wisconsin, and Garland, Texas. Chula Vista, home to approximately 279,000 residents with a median age of 36 and an average household income of $102,000, is witnessing a surge in borrowing. The WalletHub report indicates that residents have accumulated significant credit card debt, ranking sixth in the nation for new debt and second in overall balance. Other California cities, including Irvine, Santa Ana, Long Beach, Riverside, and Fresno, are also experiencing rising delinquency rates. Despite a decrease in the consumer price index from its peak of 9.1%, inflation remains above pre-pandemic levels. This financial strain is echoed in new data from the New York Federal Reserve, which shows that 8.9% of credit card debt is now delinquent, a rate higher than before the pandemic. Additionally, average credit card interest rates have surged from 16% in February 2022 to 20.67%, nearing record highs, further complicating the financial landscape for consumers.