**Department stores in the United States are facing a surge in credit delinquencies, mirroring the broader economic distress brought on by escalating inflation and interest rate hikes that have eroded purchasing power.**
**According to data compiled by the Federal Reserve, the delinquency rate for department store credit cards hit 4.3% in the fourth quarter of 2022, a significant increase from the 3.4% recorded a year earlier. This marks the highest level of delinquencies since the Great Recession of 2008.**
**The rise in delinquencies is a clear indication of the financial strain faced by many American households as they struggle to keep up with the rising cost of living. Inflation has pushed up the prices of essential goods and services, while interest rate hikes have made it more expensive to borrow money.**
**As a result, consumers are being forced to prioritize their spending, often cutting back on non-essential purchases such as clothing and home goods, which are typically purchased at department stores.**
**The surge in delinquencies is particularly concerning for department stores that have traditionally relied on credit cards as a key source of revenue. Many of these stores offer their own branded credit cards, which often come with attractive rewards and financing options.**
**However, as delinquencies rise, department stores may be forced to tighten their credit standards, making it harder for customers to qualify for credit or obtain favorable terms.**
**This could lead to a further decline in sales, as customers who are unable to use their credit cards may be less likely to shop at department stores.**
**The combination of rising delinquencies and declining sales is putting a significant strain on department stores, many of which are already struggling with the challenges of online retail and changing consumer preferences.**
**Unless the economic outlook improves and consumers regain their purchasing power, department stores may face a difficult road ahead.**.
