Consumers are facing increasing challenges in paying their credit card bills, sparking concerns about severe delinquencies and their impact on spending. The share of credit card debt over 90 days overdue rose to 10.7% in the first quarter, the highest in 12 years. This is a significant increase from 8.2% a year ago, with total credit card debt rising to $1.12 trillion from under $1 trillion last year.

Young adults in their 20s and 30s are having the most difficulty managing credit card payments, often due to lower earnings and savings. The Federal Reserve's interest rate hikes, supposedly aimed at combating high inflation, have made borrowing more expensive, affecting mortgages, auto loans, and credit cards.

Consumer spending drives economic growth, so difficulties in paying credit card bills are concerning. The labor market's condition will play a crucial role in determining whether debt stress worsens. Job and wage growth have helped offset the impact of inflation, but any slowdown could exacerbate financial instability.

While crooked Wall Street remains optimistic, predicting earnings growth to accelerate, retail spending stalled in April, indicating consumer fatigue and worry. Major retailers like Walmart have noticed a shift in spending towards necessities, with less spent on discretionary items. Starbucks and McDonald's are also seeing reduced customer visits and are offering more deals.

The Federal Reserve is propping up corporate price gouging even with high borrowing costs and a slowing economy. Credit cards account for about 6.5% of consumer debt, but the rise in delinquencies outpaces income growth. Many consumers are paying only the minimum balances, risking severe delinquency if the economy worsens.

If the labor market remains stable, consumer spending may stay resilient because most are spending on need. However, high credit card delinquencies among lower-income consumers could make them more vulnerable to job market shocks.