Inflation and higher interest rates are beginning to take a heavy toll on Americans.

A new report by the Federal Reserve Bank of New York shows the number of people falling behind on repayments for credit cards, auto loans and mortgages is on the rise.

This is known as delinquency, and it comes as total levels of household debt rose by 1.1% in the first three months of 2024—hitting $17.69 trillion.

"An increasing number of borrowers missed credit card payments, revealing worsening financial distress among some households," New York Fed researcher Joelle Scally said.

Overall, 3.2% of consumer debt was in some kind of delinquency by the end of March, but that's about 1.5 percentage points lower than before the pandemic.

Across all types of credit in the first quarter, there was a sharp rise in cases where bills are more than 90 days' overdue, which is described as "serious delinquency."

About 0.92% of mortgage debt gained this status between January and March, compared with 0.59% over the same period a year earlier. Seriously delinquent auto loan debt stood at 2.78% in the latest figures—up from 2.33% in Q1 2023.

But all that pales in comparison to credit card delinquencies—which recorded the highest 12-month jump among all financing categories.

Between January and March last year, about 4.57% of credit card balances were over three months late. A year on, it's 6.86%—nearly a 50% increase.

The blessing of fixed-rate mortgages

Whereas European homeowners typically secure new fixed-rate deals every two or five years, most Americans carry the same interest rate for the lifetime of the loan.

You could argue this has helped protect U.S. consumers from the economic shock of the Fed's drastic measures to cool inflation, with federal fund rates surging from 0.25% to 5.5% in 15 months.

This report shows a modest uptick in the number of mortgages in an early stage of delinquency, but according to the Fed, they "remain low by historical standards."

For comparison, the U.K. saw a substantial rise in late mortgage payments over the course of last year. Balances outstanding stood at $18.7 billion from January to March 2023 but surged to $25.7 billion by the final quarter.

This reflects the pain British homeowners are facing as they move on to new deals at much higher rates.

Inflation in the U.S. has been sticky to say the least, but it is slowly coming down. The Consumer Price Index fell slightly to 3.4% in April—potentially opening the door for the Fed to cut interest rates later in the year.

This may not be enough to reverse the tide of increasing delinquency rates.

While the cost of borrowing may soon fall, the cost of living remains high, and that might explain why more Americans are turning to credit in the first place.