Rising Credit Card Delinquencies and Potential Relief Measures under a Harris Administration

The surge in credit card delinquencies is attributed to various factors, including a steep increase in living costs and interest rates, which have risen to 21.51% as of May 2024. Nearly 10% of credit card balances are now overdue, the highest rate in over a decade, reflecting the financial stress many Americans are experiencing as they deplete their savings. The Federal Reserve’s actions, including maintaining high interest rates to combat inflation, have exacerbated the situation, making borrowing more expensive and less manageable for consumers.

Potential Relief Measures Under a Harris Administration

Should Kamala Harris win the presidency, analysts suggest her administration may align with President Biden’s regulatory approach, which could be seen as beneficial for the banking sector and consumers alike. Moody’s Ratings has indicated that a Harris administration could implement policies that provide financial relief, such as tax credits and benefits aimed at lower-income individuals, who have been disproportionately affected by rising delinquency rates.

Economic Context

The economic landscape has shown signs of deterioration, with a worsening labor market and increased unemployment rates contributing to financial instability. As Americans increasingly rely on credit to meet everyday expenses, the potential for policy changes under a Harris administration could offer a pathway to alleviate some of the financial burdens faced by consumers, particularly those with lower incomes and credit scores.