Americans currently owe a total of $1.17 trillion in debt, a record high credit cardaccording to a New report on household debt From the Federal Reserve Bank of New York.
Credit card balances increased by $24 billion in the third quarter of 2024, an increase of 8.1% over the same period last year.
Despite the increase, credit card delinquency rate The New York Fed found that 8.8% of balances turned into delinquencies last year, compared with 9.1% in the previous quarter. New York Fed researchers said in a news release Wednesday that the change could “show that rising debt burdens remain manageable.”
“Overall, balance sheets look pretty good for households,” the researchers added.
Credit card debt has remained stable over the past two decades; however, since the onset of the pandemic, households have largely spent their excess savings, triggering a rebound in credit card balances. Despite higher borrowing costs, consumer spending continues to remain strong.
But now, growth in credit card balances has slowed, with separate quarterly credit industry Insight report Also found from TransUnion.
Average balance per consumer is $6,329, rising Only 4.8% TransUnion found that the annual growth rate was 11.2%, compared with 12.4% growth the year before.
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Another survey showed that over the past three months, 42% of Americans said their total debt had stayed the same, while 28% had seen an increase. achievehelping consumers manage debt.
For those in the latter category, most said the increase was due to continued difficulties in making ends meet. Others cited widespread overspending, job losses or reduced wages. The survey of 2,000 adults with one or more types of consumer debt was conducted in October.
“Overall, unemployment is low and wages are up, but these macroeconomic conditions are not being felt the same way, especially for consumers who live in areas where inflation will be most affected,” said Brad Stroh, co-founder of Achieve. Word.
Credit card interest rates are still as high as 20%
At the same time, credit cards have become one of the most expensive ways to borrow money.
Low-income families must do whatever they can to make ends meet price increaseHit particularly hard after 11 consecutive Fed actions interest rate hike Raising average credit card interest rates above 20% — close to record high.
Average credit card interest rates drop even as Fed lowers benchmark barely wavered.
For those with variable-rate debt, such as credit cards, “it would obviously be helpful if interest rates fell,” New York Fed researchers said.
However, “the amount borrowed is more important than the interest rate,” they added.
