What Happens to EAFE Developed (EFA) When Credit Card Delinquency Exceeds 5%?
Credit card delinquency above 5% signals acute consumer stress. What happens to retailers, banks, and the consumer economy at these levels?
How EAFE Developed (EFA) Responds
Scenario Background
Credit card delinquency rates measure the share of credit card balances that are 30 days or more past due. The long-run average is roughly 3-4%. Rates above 5% signal broad-based consumer financial stress: households are struggling to service revolving debt, and banks face rising charge-offs.
Read full scenario analysis →Historical Context
Credit card delinquency exceeded 5% during the early 1990s recession (peak 5.5% in 1991), 2001 recession aftermath (5.0% in 2003), and 2008-2010 (peak 6.8% in Q2 2009). The 2009 peak was the highest in the post-war era. The 2020 COVID episode saw delinquency spike briefly but fiscal support (stimulus checks, expanded unemployment) reversed it within months, never breaching 3%. The 2023-2025 period saw delinquency rise from post-COVID lows toward 4%, still below the 5% threshold but accelerating....
What to Watch For
- •Charge-off rates rising (leads the delinquency number by 1 quarter)
- •Senior Loan Officer Opinion Survey showing tightening consumer credit standards
- •Auto loan delinquency rising alongside card stress (broader consumer signal)
- •Unemployment rising above 5%
- •Personal savings rate falling below 3% (cushion depletion)
Other Assets When Credit Card Delinquency Exceeds 5%
Other Scenarios Affecting EAFE Developed (EFA)
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