In a potential red flag for the U.S. economy as a whole, Macy’s said it was dealing with a surge in customers who failed to pay their credit cards. Macy’s Chief Financial Officer and COO Adrian Mitchell told Wall Street analysts on Tuesday that the company was surprised by the speed and magnitude of the increase in delinquencies. CNN report. He said the rate “accelerated” in June and July. “Revenues have increased as interest rates have risen, but this has been offset by higher bad debt assumptions and write-offs,” he said. Yahoo Finance.
“I think credit card revenue shows some of the pressure we’re really putting on consumers,” Mitchell said. “This is about credit card balances, student loans, auto loans and mortgages that we know will be the focus in the next month or two.” Yahoo says Macy’s Citibank credit His card has an annual interest rate of almost 32%. The company said it was working with Citibank to “reduce the high-risk segment and surgically reduce the risk.” US consumer credit card debt topped $1 trillion for the first time in the second quarter of this year, according to the New York Federal Reserve, CNN reports.
Mitchell said Macy’s credit card revenue fell 36% year-over-year.The company’s shares fell 14.1% on Tuesday in its worst day since June 2020, with other retailers also down, reports said. Reuters. The company expects consumer spending to slow down during the holiday season. “It is prudent to maintain a cautious view of consumer and discretionary spending capacity,” Mitchell said. (Read more Macy’s stories.)