Tracking The Rising Rate Of US Credit Card Debt

Faced with an uncertain economic forecast and stubbornly high prices after years of inflation, it’s no surprise that many American consumers have been forced to amass debt to make ends meet.

But the cost of borrowing money has also been rising due to interest rate hikes, so all of that debt is only becoming more expensive to pay back. And the trend seems to only be getting more troubling as time goes on.

Following the data

The Federal Reserve Bank of New York recently released a new report showing how much credit card debt the American population currently owes … and the numbers are staggering:

• Outstanding credit card balances have reached a record-high of about $1.14 trillion
• Per customer, that comes out to roughly $6,329 — or nearly 5% higher than last year
• Over the course of the past year, more than 9% of those balances became delinquent

Unfortunately, this means too many consumers are getting caught in a spiral that can seem impossible to escape. And once those credit cards reach their limit, there usually aren’t many good options for additional financial assistance.

Looking for a way out

TransUnion executive Michele Raneri said that the staggering increase in credit card debt is “a pretty good indicator that people are stretched.”
And even though an early spike in debt was largely attributed to “revenge spending” after COVID-19 lockdowns were lifted, the past couple of years seems to have been fueled by necessity rather than desire.

The current credit card charges somewhere around 20% interest, so if you’ve been adding to your balance it’s pivotal to start chipping away at it wherever possible.

Steps you can take to achieve this goal include obtaining a lower-interest personal loan to pay off your balance or transferring your debt to another credit card.

Chris Agee August 9th, 2024

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