Seriously overdue credit card debt is at the highest level in more than a decade, and people 35 and under are struggling more than other age groups to pay their bills.

The share of credit card debt that’s severely delinquent, defined as being more than 90 days overdue, rose to 10.7% during the first quarter of 2024, according to the Federal Reserve Bank of New York. A year ago, just 8.2% of credit card debt was severely delinquent.

If you’re experiencing delinquency, or at risk of it, experts advise speaking with a nonprofit credit counselor and negotiating with your creditors directly. Here’s what you should know:

WHAT SHOULD I DO IF I’M AT RISK OF DELINQUENCY?

Bruce McClary, senior vice president at the National Foundation for Credit Counseling, says that anyone at risk of delinquency should reach out as soon as possible for help from a nonprofit credit counselor, some of whom can be found through his organization. The consultation is free, and a non-judgmental counselor can give guidance towards a long-term solution.

Nonprofits can also help create debt management plans that have lower interest rates, no late fees, and a single payment each month, McClary said. These plans may come with maintenance fees, which vary, but the fees are offset by the overall savings on the debt. McClary urged borrowers to be careful of scammers and for-profit debt consolidation companies, which often charge much higher fees than nonprofit organizations. The Consumer Financial Protection Bureau has a helpful breakdown comparing the two.

Martin Lynch, president of the Financial Counseling Association of America, echoed this advice.

“Taking that first step and contacting a counselor is difficult for many people,” Lynch said. He emphasized that consumers in debt should do their best to “first, relax,” and then to be as forthcoming as possible about their circumstances with the counselor.

“You’ll be talking to someone for free, who will listen to you describe your situation,” he said. “You can share your concerns without being judged for falling into difficulty.”

WHAT ABOUT NEGOTIATING WITH CREDITORS?

Both Lynch and McClary urge borrowers to reach out directly to credit card companies to negotiate interest rates, fees, and long-term payment plans, noting that it’s in the companies’ best interests if you pay before the debt goes into collections.

“The best thing to do is to reach out, give an honest assessment of your ability to pay over time, and ask what options are available to you both ‘on and off-the-menu,’” McClary said. This kind of phrasing can give creditors an opening to offer more flexibility, he said.

McClary and other experts stress that most credit card companies and other lenders have hardship programs available for cases like these. Such options gained visibility during the COVID-19 pandemic, when more companies publicly advertised that consumers facing difficulty may skip or defer payments without penalties.

WHY ARE DELINQUENCIES INCREASING?

The average annual interest rate on a new credit card is 24.71%, according to LendingTree, the highest since the company began tracking in 2019. That’s in part because the Federal Reserve has raised its key interest rate rate to a 23-year high to combat the highest inflation in four decades, which peaked at 9.1% in June 2022.

Simultaneously, pandemic-era aid such as stimulus payments, the child tax credit, increased unemployment benefits, and a moratorium on student loan payments has ended. Wage gains haven’t all kept up with inflation, which hits lower-income consumers harder, and rent increases have eaten into savings some consumers may have built up during the early years of the pandemic.

Silvio Tavares, CEO of VantageScore, a credit score modeling and analytics company, said that delinquencies have now exceeded their pre-pandemic levels, and that renters are especially vulnerable to falling behind.

“Younger and less affluent people are experiencing challenges,” he said. “And high interest rates are having an effect.”

Tavares said the most important thing a borrower can do is to know their credit score and keep up with payments to avoid paying additional interest on revolving balances and debt. He cautioned consumers not to over-extend themselves with “buy now, pay later” loans, which are increasingly available “at every checkout.”

HOW WORRISOME IS THE INCREASE IN DELINQUENCIES?

Credit cards only make up about 6.5% of consumer debt, according to a Bank of America Global Research report, but the increase in delinquencies appears to be outpacing income growth.

According to McClary, there’s also likely a large group of consumers paying minimum balances and staying out of delinquency for now but who are too financially stressed to pay their balances in full. A worsening of the economy could push those consumers into severe delinquency, he said.

On top of increasing credit card delinquencies, retail spending stalled in April. Walmart has said its customers are spending more on necessities and less on discretionary goods. Starbucks lowered its sales expectations, and McDonald’s is offering more deals as people cut back.