The Paletz Law Blog

The Credit Card Crisis That’s Coming for Your Rent Collections: What Landlords Need to Know

January 22nd, 2026 | By: Paletz Law Press

In Paletz Law’s continuing effort to keep our landlords and property owners updated on the latest rental and tenant trends and activities, we are sharing this information provided in a new report from GlobeSt. And The Guarantor. The report focuses on their belief that a financial storm is approaching, which could significantly impact rent collection for multifamily properties. 

With Americans’ total credit card balances hitting a record $1.2 trillion in 2025 and the share of those balances past due still climbing, the percentage of credit card accounts at least 90 days past due hit a 12-year high in the fourth quarter of 2024.

According to data from the Federal Reserve Bank of Philadelphia, 0.90% of accounts were delinquent, the most since the Fed bank began its report. It’s only a slight increase from the 0.89% in the fourth quarter of 2023, but a larger spike from the 0.70% seen in 2022.

The Federal Reserve statistics on this issue are overwhelming. The serious delinquency rate nearly doubled from around 1.6% in 2021 to over 3% in 2025. In fact, by early 2025, the portion of credit card debt severely delinquent (90+ days) approached levels last seen during the 2008 financial crisis. Even more alarming, as of Q1 2025, over 1 in every 8 credit card accounts was more than 3 months behind on their payments.

For property owners and operators, this isn’t just another economic indicator—it’s a direct threat to your bottom line, requiring you to make immediate strategic moves. 

Renters Lead the Credit Crunch Surge 

The credit card delinquency surge isn’t hitting all demographics equally. We are sure it is of little surprise to landlords that renters, unlike homeowners, 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 reserves offered by homeownership, are continually feeling increasing financial stress. 

Early Warning Signs 

Forward-thinking multi-family operators are already connecting the dots between credit distress and rent collection risk. When credit cards go unpaid, it can predict trouble with rent. Renters might prioritize the roof over their head, but rising card delinquencies suggest many are running out of financial buffers. 

For example, some 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.

What You Can Do

Most property owners have now begun 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.

Consider this example from the report: 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 complaints from their owner clients. The lesson is clear: short-term occupancy gains from relaxed standards create long-term collection disasters. 

Proactive operators are also 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.

The Bottom Line for Landlords

The big takeaway for rental housing professionals is to treat rising credit card delinquencies as the canary in the coal mine. It’s a prevalent signal that many renters’ finances are deteriorating. The time for reactive management has passed and operators should consider embracing proactive risk management strategies that acknowledge this new financial reality.

By staying proactive, you’re also keeping quality underwriting, monitoring portfolio risk metrics, and perhaps adjusting rent growth expectations in highly exposed communities. Property owners should be able to navigate this period of rising consumer credit stress. Obviously, the time to prepare for renter financial trouble is before missed rent payments start piling up.

The credit card delinquency surge represents more than just a statistical trend, it’s a fundamental shift in renters’ financial stability that will define successful property operations in the future. 

Sources: The Guarantors and GlobeSt.