Bank Card Defaults Soar to Five Year High

Released today, the S&P/Experian Consumer Credit Default Indices showed the largest two-month increase in the rate at which consumers are defaulting on credit card debt since 2010.

The bank card default rate increased 15 basis points to 2.99% following an increase of 23 basis points in February, the largest two month increase since April 2010.

Slowing retail sales in March, lackluster wage growth are contributing factors the increase in the speed at which consumers are failing to pay their credit card bills. Card holders are also likely running into the upper-end of their available credit and are having to choose between necessities like housing and keeping that card in the wallets.

As more Americans reach the end of their ability to buy retail goods on credit, those in the retail trade are likely to see more of a slowdown in sales.

The barely growing economy may have been largely paid for on plastic – and the limit may have just been hit.