On August 6, the CFPB published a blog post regarding a rise in credit card delinquencies since the Covid-19 pandemic. The Bureau reported an increase in credit scores and a decrease in credit card delinquencies during the pandemic because of pandemic aid and forced savings, whereas 2022 and 2023 exhibited an increase in delinquencies. The Bureau pointed to “loosened” lending standards during the pandemic as a key reason why credit card delinquencies were about two percentage points higher than in 2019.

 

According to the blog post, credit cards originated in 2021, 2022 and 2023 became delinquent more rapidly than credit cards originated in previous years. Specifically, about 8 percent of credit cards in 2022 and 2023 became delinquent around two years after origination; in 2016, the same percentage of delinquency occurred after about four years. Furthermore, the CFPB referenced data from the Fed’s Senior Loan Officer Opinion Survey to support its claim that “new credit cards were opened for borrowers who were relatively riskier despite lenders saying they were tightening standards in 2020.” The post concluded that a small but “significant” portion of those riskier borrowers went delinquent soon after getting the card.