Cash Out Refis 10-Yr High, Private-Label Credit Card Delinquencies at 7-Yr High

If you think the economy is improving, you better check your facts and some disturbing trends.

Despite the much ballyhooed "strong jobs" economy, things are not what they seem upon closer inspection.

The share of private-label credit cards with accounts at least 60 days delinquent is 4.65%, up from 4.08% in March 2017, Equifax said Wednesday. That’s the highest since early 2011, the credit reporting agency said.

Some banks have expanded their lending to subprime borrowers as the economy has improved, says Matt Schulz, senior industry analyst for

Private-label credit card interest rates are higher than credit cards generally. They have been rising as the Federal Reserve has boosted short-term rates since late 2015, increasing the payment burden on those subprime borrowers. The rate for private-label cards is about 25.5%, up from 24.99% six months ago, according to The average rate for all credit cards is 16.73%, up from 16.15%.

Who Can Afford 25% Rates?

Who can afford 25% interest rates with balances rolling over every month?

The answer, of course, is no one.

This leads up to what I will label the logical non-solution.

Logical Non-Solution

Data from Federal Housing Finance Agency show the Home ATM is Spewing Cash.

Equity pulled from homes to finance consumer spending and property improvements and pay off other debts rose in the first quarter to the highest in almost a decade, according to Federal Housing Finance Agency data.

Good Times

Let the good times roll baby!

The logical non-solution works only so long as home prices keep rising, employment stays elevated, and credit keeps expanding.

I suspect the party is about over.

For further discussion, please see my prior report Housing ATM is Back (But it won't work any better this time).

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Mike "Mish" Shedlock


When you say store based CC I think first of Lowes and Home Depot, (Lowes offers a discount) and then gasoline credit cards, (Chevron offers a discount) So if I had a big remodel done and now I can't make the monthly, that sounds like it.


Hi @Mish. I can't find that chart anymore. I think you should know about. it Could you please try to find it?


Perhaps, Themo, the real story is that these are late stage developments. Rather than, as proposed by Matt Schulz, lending to Subprime is less about 'economic confidence' and more about a saturation of lending to the above segments, we'd be closer to the truth. Profits growth is, after all, the be all and end all of life itself