Americans’ Credit Card Debt Hits Record High of $1.17 Trillion
Americans’ credit card debt has reached a fresh record high, climbing to $1.17 trillion at the end of September, according to a new report from the New York Federal Reserve. The increase of $24 billion from the previous quarter marks the highest level on record in data dating back to 2003.
The report shows that total household debt also climbed to a new high of $17.94 trillion, with balances on mortgages, auto loans, and student loans also seeing significant growth. Despite this, growth in income has outpaced debt, with elevated delinquency rates revealing stress for many households.
Credit card delinquencies did ease slightly last quarter to 8.8%, down from 9.1% the previous quarter. However, delinquencies for auto loans and mortgages worsened, rising by 0.2% and 0.3% respectively. The rapid growth in debt and delinquencies has been affecting younger borrowers, with researchers noting “notably elevated flows into delinquency, particularly for credit cards as well as auto loans during the past few years.”
The growth in debt balances is attributed partly to inflation and higher interest rates, which have led to higher payments from consumers. The situation has sparked concerns, with researchers urging vigilance, particularly among younger borrowers. The report highlights the need for households to manage their debt wisely and build a stable financial future.
