Credit card debt hits record $1.17 trillion, New York Fed research shows

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Household debt in the United States grew by another $147 billion over the third quarter of 2024, with credit card debt being one of the leading drivers of the new debt.

This is according to the Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York’s Center for Microeconomic Data, which noted that the $147 billion increase in household debt amounts to a 0.8 percent increase in the total household debt at the end of the third quarter, which is now $17.94 trillion. (Related: Credit card DEBT has SOARED, thanks to BIDENFLATION.)

The increase was primarily led, as always, by mortgage debt, which rose by $75 billion. Credit card debt came in second, increasing by $24 billion, followed by auto loan debt at $18 billion.

Credit card balances as they stand are now at a record-high of $1.17 trillion, around 8.1 percent higher than they were at the end of the third quarter of last year.

Despite the increase, the report noted that delinquency rates for credit card debt has improved, with a slightly lower 8.8 percent of outstanding debt transitioning to delinquency over the last year, compared with 9.1 percent in the previous quarter. This slight change, the New York Fed noted, could “suggest that rising debt burdens remain manageable.”

“Overall, balance sheets look pretty good for households,” claimed the New York Fed.

The average balance per consumer stands at around $6,329, a 4.8 percent increase year-over-year and a 11.2 percent and 12.4 percent increase from 2022 and 2021, respectively, according to a credit industry insights report from TransUnion.

Delinquency rates increased over all debt for the third quarter

“Although household balances continue to rise in nominal terms, growth in income has outpaced debt,” said New York Fed Economic Research Advisor Donghoon Lee. “Still, elevated delinquency rates reveal stress for many households, even amid some moderation in delinquency trends this quarter.”

In a survey by debt and financial services firm Achieve, 42 percent of Americans said their total debt has not changed in the last three months, while another 28 percent actually said that their debt rose over the last quarter.

Of those who saw their debts grow, most of them said that the increase was due to ongoing difficulties making ends meet. Others cited general overspending, sudden unemployment or reduced wages not keeping up with essential spending.

“Across the board, unemployment is low and wages have risen, but those macroeconomic conditions aren’t felt equally across the population, especially for consumers who live in areas where the impact of inflation is the greatest,” said Achieve co-founder and co-CEO Brad Stroh.

Personal finance experts warn that credit cards remain one of the most expensive ways for consumers to borrow money, especially for lower-income households, who are more likely to take in debt to cover the price increases of the past year, especially since the Federal Reserve is now at the end of its string of 11 interest rate hikes, which lifted average credit card debt rates to more than 20 percent, near an all-time high.

Researchers from the New York Fed noted that the Fed’s first rate cut in years may be able to help those with credit card debt, provided that consumers watch how much they borrow, which is sometimes “more important than the interest rate,” the researchers said.

Watch this video from financial expert John Williams discussing America’s massive credit card debt bomb.

This video is from the ThisisJohnWilliams channel on Brighteon.com.