Arizona economist warns credit card delinquency rates approaching pre-2008 crisis levels

Rising credit card delinquency rates are flashing a warning sign for the U.S. economy, University of Arizona economist Evan Taylor said Monday.

“Credit card delinquency rates have gone up quite a bit over the last couple of years,” Taylor told KTAR News 92.3 FM’s Arizona’s Morning News. “They’re reaching sort of the highs that we saw right before the financial crisis.”

Taylor, an associate professor at the Eller College of Management, said the trend does not guarantee an economic downturn but called it a red flag.

“I’m not saying we’re heading towards a huge crisis or anything like that. But certainly, those credit card delinquency rates are a warning sign for the economy,” he said.

U.S. credit card debt reportedly reached a record $1.33 trillion earlier this year.

The financial strain hits harder for Arizona’s most vulnerable.

Since Congress enacted HR 1 last summer, Arizona has issued $600 million less in SNAP benefits, with roughly 400,000 residents losing food assistance.

“The impact on families is definitely going to be the largest impact to this,” said Taylor. “As for the impact on the overall economy, $600 million is a lot of money. The state economy is something more like $500 billion. It’s not going to have a huge impact on the labor market or the unemployment rate as a whole. The bigger impact is going to be on those families that need that money for food.”

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