The new red flag: Surging card delinquencies
Renters are ringing up trouble on their credit cards. Americans’ total credit card balances hit a record $1.2 trillion at the end of 2024 , and the share of those balances that’s past due is climbing fast. After a pandemic-era lull, credit card delinquencies (especially those over 90 days past due) started roaring back. Credit card delinquency rates have surged in the past five years, after hitting historic lows during 2020–2021. Federal Reserve data shows the serious delinquency rate nearly doubled from around 1.6% in 2021 to over 3% in late 2024. In fact, by early 2025 the portion of credit card debt severely delinquent (90+ days) approached levels last seen during the 2008 financial crisis – a startling signal given today’s strong job market. As of Q1 2025, over 1 in every 8 credit card accounts was over 3 months behind on their credit card payment.
What’s driving this trend? Inflation and interest rates. Households weathered the early pandemic with savings and stimulus, but high inflation since 2021 has eroded buying power. Everyday expenses like groceries and gas remain significantly pricier than a few years ago. To cope, many consumers' spending is increasingly being financed by credit cards. At the same time, the Federal Reserve’s rate hikes have pushed credit card APRs to brutal heights – the average card now charges around 21–22% interest , the highest since the Fed began tracking in 1994. Carrying a balance has never been more expensive, so debts snowball quickly for anyone falling behind. It’s a toxic combination squeezing those without ample income or savings.
A warning sign of renter distress
These macro signals are significant signs of stress beneath the surface. In particular, renters are feeling the squeeze. Unlike homeowners, renters haven’t benefited from rising home equity, tend to participate much less in the stock market and often have thinner financial cushions. Many middle- and lower-income renters – who lack the wealth buffers of homeownership – are now feeling financial stress and that’s driving up these delinquency levels. In other words, the households missing credit card payments are disproportionately renters living paycheck to paycheck. They’ve been hit hard by inflation and are now juggling debts just to cover essentials.
When credit cards go unpaid, it can foreshadow trouble with rent. Renters might prioritize the roof over their head in a crunch, but rising card delinquencies suggest many are running out of wiggle room. Experts warn that these late credit payments are likely to keep climbing in 2025. For property owners and operators, this is a valuable early-warning indicator: financial distress is brewing among a chunk of the renter population. It’s not just hypothetical – we’re already seeing the effects. For instance, major card lenders that cater to subprime borrowers (like Synchrony and Discover) report jumps in their charge-off and delinquency rates, explicitly citing the impact of inflation on consumers’ ability to pay. Those same financially stretched customers are often residents in Class B/C apartments, many of which are managed by partners of TheGuarantors.
TheGuarantors operates with operators as a risk management partner to help them preserve high quality screening standards without hurting their occupancy. I recently spoke to one of our accounts in Texas who decided to expand their use of the lease guarantee product in anticipation of the consumer pressures they expect to build in their markets. This kind of forward planning — acting on early warning signals like rising card delinquencies — can make the difference between riding out a downturn smoothly and being caught off guard.
Implications for property operators
For landlords and property managers, rising credit card stress translates into higher rent collection risk. If a tenant is months behind on their Visa or MasterCard, there’s a good chance they’re one unexpected expense away from missing rent. Industry data already hint at this linkage. The National Multifamily Housing Council’s rent payment tracker (which monitored on-time rent payments during the pandemic) isn’t flashing red yet – nationally, most renters are still paying eventually. But the trend is worsening at the margins. Operators report slight upticks in late rent payments and payment plan requests in communities with more blue-collar tenants, correlating with the broader consumer debt distress.
Prudence is the name of the game in 2025. Owners are tightening their underwriting and resident screening practices in response to these warning signs. Credit scores and debt-to-income ratios are under closer scrutiny than ever for new lease applicants. Where a marginal credit score might have been overlooked two years ago, today it raises a flag – operators know that a tenant’s overloaded credit cards could spell trouble down the road. Screening tools that verify an applicant’s existing debt obligations and payment history are proving invaluable.
Recently, I spoke with a Maryland property manager who, last year, had lowered their screening standards in order to increase occupancy. Predictably, they are now beginning to see a noticeable rise in defaults — an issue that has started drawing pointed complaints from their owner clients. We worked together to develop a plan that uses a tailored amount of coverage to help mitigate these effects moving forward. It's a reminder that easing standards may solve one short-term problem, only to create a larger long-term risk if financial conditions among renters continue to deteriorate.
Regional pockets of risk
Importantly, the financial stress isn’t evenly distributed. Some markets are far more exposed to struggling renters than others. Sun Belt regions – the boomtowns of the South and West – appear most at risk. These areas saw huge in-migration and rent growth in recent years, but many new residents are service workers or young families stretched thin by rising costs. Credit data backs this up: Nevada and Florida now lead the nation in credit card delinquencies (roughly 13% of balances delinquent), far above states like Massachusetts or Minnesota (around 7–9%) . In fact, an analysis by LendingTree found that the five most “credit stressed” metro areas in the country – including El Paso and McAllen in Texas and Miami and Riverside – are all in the Sun Belt. In those cities, over half of consumers are carrying balances on three or more credit cards at once.
Sun Belt markets have higher average credit card delinquency rates than the Northeast. In 2024, major Sun Belt states (e.g. FL, TX, NV) averaged about 11% of card balances seriously delinquent, versus roughly 9% in key Northeastern states. For multifamily operators, this means knowing your market matters. Properties in debt-stressed regions may need extra vigilance. For example, an apartment portfolio heavy in Florida or Nevada should budget for slightly higher bad-debt write-offs and consider more stringent income verification. On the other hand, an owner with portfolios in the Northeast might see more stable rent payments on average, but shouldn’t get complacent – even in “safe” markets, pockets of renters are struggling.
And to make things worse, it is in Sun Belt markets that we see the largest number of oversupplied sub-markets, leading to some operators lowering their screening standards to fill more units. This creates a dangerous combination of higher financial stress on renters and lower approval standards - which may lead to a larger than expected rise in financial pressure on these assets. And all this is in the context of "higher for longer" rate environment.
Staying ahead of the curve
The big takeaway for rental housing professionals is to treat rising credit card delinquencies as the canary in the coal mine. It’s a loud macroeconomic signal that many renters’ finances are deteriorating. Proactive operators are responding by shoring up their screening processes, keeping a closer eye on local economic conditions, and communicating with residents. Some are updating their lease contract language or offering hardship plans, anticipating that a certain percentage of tenants may falter if consumer debt issues snowball.
Nobody likes to see customers in distress. But by staying proactive – keeping quality underwriting, monitoring portfolio risk metrics, and perhaps adjusting rent growth expectations in highly exposed markets – property owners can navigate this period of rising consumer credit stress. The time to prepare for renter financial trouble is before missed rent payments start piling up. The surge in credit card delinquencies is a flashing warning light that deserves attention. In an industry built on steady cash flows, understanding your residents’ economic reality is part of the job – and right now, that reality is getting tougher for a lot of renters living on plastic.
Sources
Federal Reserve Bank of New York – Quarterly Report on Household Debt and Credit, 2025 Q1
Board of Governors of the Federal Reserve System – Charge-Off and Delinquency Rates on Loans
Moody’s Analytics via AP News –Credit card debt: Renters and poor people are falling behind
TransUnion – Q4 2023 Credit Industry Insights Report
LendingTree – Credit Card Stress Index (2025)
WalletHub – Credit Card Statistics by State, 2025
