The Wall Street Journal wants you to believe American families aren’t carrying enough credit-card debt. That is not a caricature. A Heard on the Street column this week looked at the 13 percent of credit-card balances that are 90 days delinquent — a figure brushing up against the post-financial-crisis peak — and the takeaway wasn’t that millions of households are in deep trouble. The takeaway was that the real problem is “a lower supply of new loans.” The nation’s leading financial broadsheet is, in printed ink, worried that too many working Americans aren’t being offered enough plastic to power the consumer economy.
Last night I opened my spreadsheet. My husband and I carry a card balance of about $4,200 that we’ve been chipping away at since we bought the rowhouse. The math on our line items is tight: $2,400 a month in childcare, a mortgage payment that hasn’t budged because we can’t refinance out of a 7 percent rate, two car payments, and a grocery budget that has expanded by roughly $120 a month even as we’ve cut back on brand names. The credit-card payment is $180. If one of us lost a job, we’d be in the 13 percent within four months, and the bank would likely send us a letter declining a credit-line increase. The Journal would write a column worrying that our lack of borrowing power was harming GDP. I would be sitting at this table trying to figure out how to feed my children.
The numbers the column deploys tell a different story from the one it wants to tell. Yes, 13 percent of balances are severely delinquent. But the column notes that fewer than 3 percent of balances are 30 days past due, well below the 2008 peak. What looks like a wave of fresh defaults is partly a slow unwind of lending to borrowers who got a pandemic-era lift from stimulus, took on new debt, and then reverted to the underlying weakness of wages that had been stagnant for decades. The stimulus provided a temporary floor. When it was removed, the floor disappeared. The defaults aren’t a new cycle of consumer fragility. They’re the old weakness, back where it always was, in households that never recovered from forty years of wage stagnation.
The column’s reassurance is that the consumer is fine. Consumer debt-service payments as a share of disposable income sit at 5.4 percent, well below the 7 percent of twenty years ago. Households can handle what they owe. But the ratio fell for reasons that have nothing to do with households being more able to pay. After 2008, banks tightened lending standards and never fully reopened. During the pandemic, stimulus temporarily improved the ability to pay. Now the stimulus is gone but the tightening isn’t. The ratio looks healthier partly because fewer people can access credit. If you can’t borrow because the bank won’t lend, your debt-service ratio improves. That’s selection effect, not resilience. The column’s own data confirms the point. A Moody’s analyst is quoted observing that once someone loses a job, recovery has become nearly impossible. Nobody can refinance — a pandemic-era mortgage at 3 percent can’t become a cash-out refinance when rates sit above 6 percent. So expensive credit-card balances just sit there, accruing interest, with no exit route. Banks are pulling back; credit-card loan growth has fallen behind GDP growth. The column looks at all of this and concludes that the problem is insufficient credit. It’s the same old frame-engineered trick, dressed in data: take a structural problem — wage stagnation, rising housing and childcare costs, a labor market where losing a job means months of precarity — and recast it as a question of credit supply. The household ledger is screaming, and the financial column’s response is to hand the family a new credit-card application and wonder why the offer isn’t arriving fast enough.
What the column cannot bring itself to say is that this economy structurally requires household debt to function. For forty years, wages stopped keeping pace with what things cost. BLS data shows average expenditures of $78,535 against income before taxes of $104,207, but that’s the average, not the median, skewed upward by households that aren’t struggling. CPI shelter rose 4.9 percent in 2024 and 4.7 percent the year before. Nearly half of all renter households are cost-burdened; among those making $45,000 to $75,000, the cost-burdened share hit 48.7 percent in 2024, per the Congressional Research Service. Credit cards became the bridge — not because of poor decisions but because the alternative is going without. The prescription. The school supplies. The grocery bill that runs $120 more than it did two years ago. The column’s own language gives the game away. It calls the delinquent balances a “lump of troubled debt,” a hangover from lending to borrowers whose “underlying fragility eventually resurfaced.” A “lump,” as if it’s a static object, not a living record of what happens when you extend credit to people whose wages haven’t kept up with the cost of the life they’re trying to finance. Those borrowers are not a “lump” of vintage credit; they are families caught in the doomspending cycle I wrote about last week, where anxiety pushes them to spend on small consolations and necessities, and the debt piles up in a spreadsheet that no longer balances. The doomspending frame is another dodge: structural desperation rebranded as a consumer psychology problem. You can’t feed your kids on the knowledge that your spending pattern has a name.
The real story is that the lending class collects the spread while families borrow to bridge the gap between wages and prices. The column notes that bank charge-off rates of about 3.8 percent are “still below the roughly 4.3 percent average since 1985.” The banks are doing just fine. But the tightening of credit supply — confirmed by the New York Fed’s own credit access survey just last week — means that the families who were barely holding on can no longer float. The people who most need a lifeline can’t get a new card, can’t increase their credit limit, and can’t consolidate. The column’s conclusion — that the problem is insufficient credit — is actually the confession. The economy needs you to borrow because it stopped paying you, and when the lending class names insufficient credit as the problem, it is naming the machine’s dependency without recognizing the dependency as the indictment.
Dorothy Day wrote, “Poverty is not a fate imposed by nature. It is a human arrangement and can be changed by human beings.” What the data describes — banks profiting from the desperation of borrowers who can’t escape, the arrangement narrated as consumer resilience — is a human arrangement. Banks extract interest from people whose only alternative to borrowing is going without. When the borrowers default, the bank writes off the loss. When the bank stops lending, the borrower has no floor. The survey data on what drives people to borrow keeps confirming the same thing: the need is structural, not psychological.
The real reckoning isn’t whether Americans have enough access to credit. It’s why they need it to survive in the first place. The pool is drained, and the people who pulled the plug are now writing columns about how the swimmer shortage is hurting the economy.