The share of Americans falling behind on their credit card payments has exceeded pre-pandemic levels—a bad omen for an economy grappling with persistent inflation and dwindling savings, economists say.

According to the New York Fed, 2% of new credit card borrowers in the third quarter were in delinquency—meaning they’re at least 30 days behind on their payments.

That’s a sizable jump from 1.7% in the first and second quarters and the highest level since pre-Covid.

Overall, credit card debt rose to $1.08 trillion, up from $1.03 trillion in the second quarter to set a new all-time high.

Alarmingly, delinquencies increased for all types of consumer credit except student loans, which were in forbearance until last month.

Consumers in delinquency “are struggling to afford their everyday expenses,” according to Charlie Wise, senior vice president of research at TransUnion. “They’re trying to keep the house of cards from collapsing.”

Ironically, household finances were bolstered during the the pandemic when lockdowns forced more people to stay home. Since then, things have taken a turn for the worse.

Stimulus sugar rush wears off

Analysts say rising delinquencies are a continuation of a trend that was interrupted during Covid when government stimulus masked Americans’ growing credit dependency.

Delinquency rates bottomed out in 2021 “as generous stimulus checks lined Americans’ pockets while spending opportunities were severely restricted at the same time,” according to James Wong, executive director of fixed income at GaoTeng Global Asset Management.

“Credit card delinquency transitions, in particular, have risen over the past 12 months and are now exceeding pre-pandemic levels,” he added. This is especially true for younger Americans, with millennials and Gen Z more likely to miss payment deadlines than baby boomers.

The data suggests there may be a correlation between declining savings and rising credit card delinquencies.

During Covid, households were able to stow away $2.1 trillion in excess savings, according to the San Francisco Fed. Roughly two years later, those excess savings were down to less than $190 billion.

The other issue: slowing wages

There’s another reason more Americans are missing their credit card payments and taking on additional debt: Wages aren’t rising fast enough to sustain their spending habits.

Consumer spending powered the U.S. economy to a 4.9% annualized growth rate in the third quarter, but economists warn that such gains will be hard to repeat.

Households’ disposable income after inflation and taxes declined in September for a third consecutive month, according to the latest data provided by the Commerce Department.

“That is not sustainable,” said James Knightley, chief international economist at ING.

“Savings are finite and are being exhausted at a rapid rate, with various estimates suggesting that excess savings accrued during the pandemic could be exhausted in the first half of next year,” he said.