US Credit Card Debt Hits $1.08 Trillion as Delinquencies Climb

Americans now owe $1.08 trillion in credit card debt, a trend being led by millennial consumers.

That’s according to a report issued Tuesday (Nov. 7) by the Federal Reserve Bank of New York on household debt, which has reached $17.2 trillion, up from $16.5 trillion this time last year. 

The report found that credit card balances jumped by $154 billion since 2022, the biggest increase since the bank began monitoring the data in 1999.

“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” Donghoon Lee, Economic Research Advisor at the New York Fed, said in a news release.

“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,” added Lee.

Meanwhile, the Fed report shows aggregate delinquency rates increasing, with 3% of outstanding debt in some stage of delinquency at the end of September. Delinquency transition rates increased for most types of debt, aside from student loans and home equity lines of credit.  

In addition, the report found a jump in the number of accounts in “serious delinquency,” that is, 90 days or more delinquent, driven by credit card debt.

The sharpest increases in credit card delinquencies were seen among borrowers between the ages of 30 and 39. In a blog post accompanying the report, Fed economists say it’s not clear why this is happening.

“The labor market and the general economy have remained resilient throughout this period, which makes pinning down the causes of rising delinquency rates more difficult,” they wrote. “Whether this is a consequence of shifts in lending, overextension, or deeper economic distress associated with higher borrowing costs and price pressures is an important topic for further research.”

A separate report last month by the Consumer Financial Protection Bureau (CFPB) found that an increasing number of U.S. card holders are carrying balances month to month, missing payments and going more than 180 days delinquent.

And nearly 10% of credit card users are in “persistent debt,” meaning they are charged more in interest and fees per year than they pay toward the principal.

“Pandemic relief programs in 2020 and 2021 enabled some card holders to pay down credit card balances, but the number of people facing persistent debt could climb if interest rates remain elevated,” the CFPB said in a news release.