Total credit card debt in the United States hit a record high of $1.08 trillion in the third quarter, the Federal Reserve Bank of New York reported Tuesday.
The Fed has been hiking its interest rate target since March of last year, causing credit card rates to rise and making taking on and paying off debt much more expensive. That compounds the affordability challenges consumers were already facing with towering inflation. “Americans’ credit card balances have surged 40% since the first quarter of 2021. High inflation and record-high credit card rates are key contributors to this trend,” said Ted Rossman, a senior industry analyst at Bankrate.
“Our research shows that 47% of credit card holders carry debt from month to month, up from 39% two years ago,” he added. “And 60% of Americans with credit card debt have been in credit card debt for at least a year, up from 50% two years ago. All of that is worrisome in the context of higher debt loads and high interest rates.”