When the average everyday American begins to have trouble paying their bills, it’s most often a sign that the economy is not doing that well and we’ve reached that point.  Credit card delinquencies have now reached and 8-year high, with no reprieve in sight.

As Michael Snyder pointed out at The Most Important News, the truth is that you can’t say that we have a booming economy until we have a year when the U.S. economy grows by at least 3 percent, and at this point, we haven’t had that since the middle of the Bush administration. There are all kinds of warning signs and red flags about this manipulated economy, but none are quite as telling as delinquencies.

When people can no longer afford to pay their credit cards or car payments because they have to eat instead, we are staring a recession in the face. In fact, the level of credit card charge-offs has risen to the highest level since 2012., according to American Banker. A charge-off is the amount of debt a company believes they can no longer collect.

Red flags are flying in the credit-card industry after a key gauge of bad debt jumped to the highest level in almost seven years.

The charge-off rate — the percentage of loans companies have decided they’ll never collect — rose to 3.82% in the first three months of 2019, the highest since the second quarter of 2012, according to data compiled by Bloomberg Intelligence. And loans 30 days past due, a harbinger of future write-offs, increased at all seven of the largest U.S. card issuers. –American Banker

At the 4 biggest U.S. banks, credit card charge-offs now account for a whopping 80 percent of all consumer credit costs. And the rising delinquencies will inevitably lead to even more charge-offs. U.S. consumers are being stretched financially to a degree that we haven’t seen since the last recession, and all the numbers indicate that this trend is only going to accelerate in the months ahead.  And, the way credit card issuers are beginning to behave indicates that they know a recession is coming.

The Federal Reserve Bank of New York reported in December that an increasing number of consumers were rejected when they applied for credit cards in 2018. The researchers said rejection rates were also up on applications to refinance mortgages. At the same time, credit card delinquencies were also rising.

It now appears that credit card companies saw the troubling trend by mid-2018 and were taking steps to limit their losses. The New York Fed report showed a sharp rise in the number of people who said a lender unilaterally closed one of their credit accounts — in most cases, a credit card or a store charge card. –Consumer Affairs

The time to prepare yourself for a recession is now.  The credit card companies are preparing themselves, and there are red flags everywhere if eyes are opened. It is not the time to take on more debt, rather, get rid of as much credit card debt as you can.  You don’t want to be harassed during an economic recession for the money you borrowed when times were good.