US Department Stores Face Elevated Credit Delinquencies as Spending Tightens

**New York, March 2, 2023** – Major department store chains in the United States are experiencing higher rates of credit delinquencies, reflecting the strain on consumer spending amid rising inflation and economic uncertainty..

**Key Points:**.

* Delinquency rates for department store credit cards have climbed to their highest levels since the 2008 financial crisis, according to data from The Clearing House, a payments company..

* Several factors are contributing to the increase in delinquencies, including rising living costs, higher interest rates, and reduced consumer confidence..

* Department stores are particularly vulnerable to these headwinds as they rely heavily on discretionary spending, which tends to be more sensitive to economic conditions..

* Some department stores are taking steps to mitigate the impact of delinquencies, such as increasing credit limits and offering more flexible payment options..

* Analysts expect delinquency rates to remain elevated in the near term as consumers continue to navigate financial challenges..


The rise in credit delinquencies at department stores highlights the ongoing pressures facing the retail sector. As consumers prioritize essential expenses, discretionary spending, such as apparel and home goods, is being cut back. This is particularly challenging for department stores, which typically offer a wide range of non-essential items..

The elevated delinquency rates also reflect the broader economic headwinds that consumers are facing. Inflation has eroded purchasing power, while rising interest rates have made it more expensive to carry debt. This combination has forced many consumers to make difficult choices about their spending..

Department stores are not the only retailers facing increased delinquencies. Other sectors, such as furniture and electronics, have also reported similar trends. This suggests that the strain on consumer spending is widespread and not limited to a particular category..


Analysts expect credit delinquencies at department stores to remain elevated in the near term. The Federal Reserve is expected to continue raising interest rates to combat inflation, which will likely further tighten consumer budgets. Additionally, the war in Ukraine and ongoing supply chain disruptions are adding to economic uncertainty..

To mitigate the impact of delinquencies, department stores are exploring various strategies. Some are offering more flexible payment options, such as buy-now-pay-later plans. Others are increasing credit limits to allow customers to make larger purchases over time..

Despite the challenges, department stores remain an important part of the retail landscape. They offer a unique shopping experience that cannot be easily replicated online. By adapting to the changing consumer environment and implementing effective strategies to manage delinquencies, department stores can position themselves for long-term success..

Leave a Reply

Your email address will not be published. Required fields are marked *