One of the hallmarks of a recession is a rise in consumer credit defaults, inevitably resulting in a rise in 3rd-party collection activity.

That has not happened yet – in fact, quite the opposite.

3rd-party collection activity is at a record low of 5.7% of consumers – well less than half the 14.6% level seen in 2008’s recession.

Despite record high credit card balances being carried by consumers, the rate of default is surprisingly low.  The Federal Reserve ending Q3 tracked consumer credit increased at a seasonally adjusted annual rate of 6.8 percent during the third quarter. Revolving credit increased at an annual rate of 12.9 percent, while nonrevolving credit increased at an annual rate of rate of 4.9 percent.

November 15 also from the Fed: Total Household Debt Reaches $16.51 trillion in Q3 2022; Mortgage and Auto Loan Originations Decline

Year-over-year increase in credit card balances is largest in more than 20 years…Third party collections are down now but for how long?

(Chart from

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