Credit card debt in the United States climbed to $1.26 trillion during the second quarter, according to research released this week by the Federal Reserve Bank of New York. The collective balances increased by $21 billion from the prior quarter, representing a 1.7% gain and approaching the previous all-time high set last year.
A notable concern emerged in delinquency figures, with the percentage of credit card balances more than 90 days past due jumping to 12.8% from 7.6% in the quarter. Researchers characterized this surge as reflecting charge-off debts persisting on credit reports rather than representing newly delinquent accounts. New delinquencies have remained relatively stable, though they continue at levels described as elevated.
Federal Reserve analysts attributed the rising debt levels to what they characterized as a K-shaped economy, in which some households thrive while others struggle financially. Approximately 175 million Americans hold credit cards, with roughly 60% carrying revolving balances month to month. According to separate research, more than half of cardholders use credit to pay for essential expenses rather than discretionary purchases.
Experts pointed to persistent inflation and elevated living costs as primary drivers behind increased borrowing. Additional research showed that consumers are turning to home equity lines of credit and personal loans alongside credit cards to stretch household budgets. Among surveyed consumers, a majority indicated they would require six months or longer to repay their credit card obligations, suggesting sustained financial pressure on household balance sheets.
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