In recent years, consumer spending has helped the U.S. economy remain healthy despite various economic headwinds such as high inflation rates and increasing housing costs. Now, as recession fears resurface, many worry that American consumers might be ‘maxed out.’

“We’re seeing heightened credit stress among high-income consumers.” Dr. Rikard Bandebo, EVP, Chief Strategist and Chief Economist at VantageScore, spoke with The Wall Street Journal to discuss recent VantageScore CreditGauge data and consumer spending amid current economic conditions.

VantageScore’s January 2024 CreditGauge shows that from January 2023 to January 2025 the rate at which people earning $150,000 or more a year are 60-to-89 days behind on their overall debts has more than doubled. Those late payments are still far lower than for other groups, at just 0.16% of outstanding balances. But the jump well outpaces the rise for the middle-income tier of consumers and the lowest-income group.

Dr. Bandebo explained that stress levels are higher among people without large nest eggs behind them in the form of homeownership or a big investment portfolio. “In 2025, more consumers are likely to struggle with balancing increased outlays with their real income.

Read the latest VantageScore CreditGauge insights: https://www.vantagescore.com/vantagescore-creditgauge-january-2025-credit-delinquencies-hit-highest-levels-in-five-years/

https://www.wsj.com/economy/consumers/consumer-credit-debt-economy-impact-634eda8d?mod=consumers_news_article_pos1