(NewsNation) — Americans now owe a record $1.08 trillion in credit card debt, a Federal Reserve report revealed this week.
Credit card balances jumped $48 billion, or roughly 5%, from the second to third quarter of 2023 as Americans continue to get squeezed by rising prices.
The average balance is now at $6,088 per consumer — the highest level in the last ten years, according to a separate credit industry insights report from TransUnion.
“Inflation has abated to a large extent in recent months, but its elevated levels in 2021 – 2022 have left overall prices sharply higher across a wide range of products and services,” Charlie Wise, senior vice president of global research and consulting at Transunion, said in a statement.
The increased borrowing has occurred amid rising credit card interest rates, making delaying payments costlier. Even then, surveys show more Americans are carrying debt from month to month.
Now, more people are falling behind, with 3% of outstanding debt in some stage of delinquency, the Federal Reserve found.
“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,” Donghoon Lee, economic research advisor at the New York Fed, said in a statement.
The latest credit card data provides some insight into why Americans are less optimistic about the state of the economy than would be expected given today’s core indicators.
Consumer spending has remained strong, which helped accelerate the nation’s economy at a faster than expected 4.9% annual rate last quarter.
But elevated prices and higher interest rates have soured a general public increasingly relying on credit cards just to get by.
