Americans Now Owe $1.08 Trillion in Credit Card Debt, New York Fed Says

Nov 16, 2023Financial Literacy, News

A recent report on household debt issued by the Federal Reserve Bank of New York found that Americans now owe $1.08 trillion in credit card debt. Credit card balances jumped by $154 billion since last year, which is the biggest increase since the bank started monitoring the data in 1999. Household debt has reached $17.2 trillion, up from $16.5 trillion in 2022.

“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, Economic Research Advisor at the New York Fed, according to PYMNTS. “The continued rise in credit card delinquency rates is broad-based across area income and region, but particularly pronounced among millennials and those with auto loans or student loans.”

The report found aggregate delinquency rates rising, as 3 percent of outstanding debt was in a stage of delinquency at the end of September. It also showed a large increase in the number of accounts in “serious delinquency” or at least 90 days delinquent, which was driven by credit card debt. Delinquency transition rates rose for most types of debt, except student loans and home equity lines of credit. 

The biggest jumps in credit card delinquencies were among borrowers between 30 and 39 years old, but Fed economists are unsure why. “Whether this is a consequence of shifts in lending, overextension, or deeper economic distress associated with higher borrowing costs and price pressures is an important topic for further research,” they wrote in a blog post accompanying the report. 

Last month, research from the Consumer Financial Protection Bureau (CFPB) found that more U.S. cardholders are carrying balances month to month, missing payments, and going over 180 days delinquent. Almost 10 percent of credit card users are in “persistent debt,” where they are charged more annually in interest and fees than they pay toward the principal. 

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