Report finds higher food prices are tied to more credit card delinquency
The rate of people failing to pay their credit card bills on time is rising, a trend that a new report says is related to the use of credit to buy food.
Credit card delinquencies rose 39.8% over the past five years, the Urban Institute said, while grocery prices rose 24% during the same period. Another 3% increase in food costs is expected in 2025. While people are using their cards to pay for other things besides food, the institute noted that food price hikes have outpaced other price increases in recent years.
When they have to choose which bills to pay, consumers tend to prioritize paying other forms of debt like mortgage and car loans over credit card bills, the report said.
The institute analyzed the rate at which credit card delinquency increased in each state and county between 2022 and 2024. Defaults rose in every state, but areas of the South and West saw the greatest changes. In Louisiana, where the increase was 41%, about 8% of consumers are now at least 60 days past due on their credit card bills, the report said.
Fed sees effect of tariffs on economy
Uncertainty about trade policy can be found across the U.S., according to the Federal Reserve’s April Beige book. The document, which the Fed updates eight times a year with a fresh look at the economy, noted that many businesses are expecting to pass on increased costs due to tariffs to consumers and are taking a wait-and-see approach to hiring.
“The outlook in several districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose,” according to the report that covered the period since the last beige book came out in early March.
The Boston, Richmond, Atlanta, Kansas City and Dallas districts saw slight economic growth, the Fed reported. In San Francisco, New York, Philadelphia and Minneapolis, growth declined, while in the St. Louis, Chicago and Cleveland regions, there had been no change.
Consumer confidence falls
April marked the fourth straight month that consumer sentiment has declined, as concerns about tariffs and the potential for more inflation weighed on the public, according to a University of Michigan survey. The university’s measure of confidence posted at 52.2, down five points from March and 25 points from one year ago.