Lower-income households face hidden crisis as credit card defaults surge

In the United States, the rise in credit card defaults has reached alarming levels in late 2024, marking the highest figures since the 2008 financial crisis. Economists report that lenders wrote off a staggering $46 billion in seriously delinquent loan balances in the first three quarters of this year, representing a 50% increase from the same timeframe in 2023. This surge is particularly detrimental for lower-income households, which have been significantly affected by years of inflation and stagnant wages. Recent data indicates that the credit card debt crisis hits particularly hard in the lower segment of the income distribution, leaving many households with little to no savings.