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American credit card debt overview:
- Who: The Federal Reserve Bank of New released its Quarterly Report on Household Debt and Credit last week.
- Why: The central bank’s quarterly report showed Americans’ debt total increased to a record $16.9 trillion in fourth quarter 2022.
- Where: The quarterly report includes consumers nationwide.
Americans racked up credit card debt at record rates last year, according to data released by the Federal Reserve Bank of New York last week.
Total household debt in the United States reached a record $16.9 trillion in the fourth quarter of 2022, an increase of $394 billion from the three months prior, according to the Quarterly Report on Household Debt and Credit.
The fourth-quarter debt total was an increase of $394 billion from the three months prior. The majority of the debt can be attributed to mortgages, according to the report.
The report showed that a total of 18.3 million American borrowers were behind on a credit card payment last year — an increase of around 2.5 million since the end of 2019 that is affecting mostly younger borrowers.
Delinquencies also increased last year while credit card balances in general increased by almost 6.6% to $986 billion during the fourth quarter — the highest growth increase ever recorded.
Credit card balances increased 15.2% year-over-year in fourth quarter 2022
Credit card balances rose 15.2% year over year in total, according to the report. The debt increase comes amid a period of inflation that the Federal Reserve attempted to quell with sweeping rate hikes, CNN Business reports.
The interest rate hikes have particularly affected the housing industry, with the central bank’s report showing mortgage originations fell to 2019 levels during the fourth quarter last year.
“Although historically low unemployment has kept consumers’ financial footing generally strong, stubbornly high prices and climbing interest rates may be testing some borrowers’ ability to repay their debts,” Wilbert van der Klaauw, economic research adviser at the New York Fed, says in a statement.
Americans are also struggling to meet their payment obligations amid the high inflation and interest rates, with delinquency transparency rates for both credit card and auto loans increasing, according to the report.
In related credit-card debt news, the Consumer Financial Protection Bureau proposed new rules earlier this month that were aimed at helping curb excessive credit card late fees.
Did your credit card debt increase last year? Let us know in the comments.
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14 thoughts onAmerican credit card debt increases at record rates
Add me please.
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ADD TO THIS LAWSUIT PLEASE
Please add me!
With these interest rates so high now, some cards you can only make the minimum payment which only gets applied TO THE INTEREST. Add me!!
Add. Me
Add me, drowning
Add me I’m having a hard time with these cards thanks to covid lock down and losing my insurance because not enough hours at work
Please add me. As the interest rate goes up I am having a hard time paying my cards. This needs to stop because we are not rich, we are the middle to low class.
Add me
What else can we do? Retired, health issues and the cost of everything we need has gone up. So we use our credit cards to get through the month when the cash is depleted. Not proud of it, but as long as the minimum payment is made we can still get by until every card is maxed out.
That describes us exactly! Yes, we’re still making at least the minimum payment. But every day we are sinking deeper and deeper in debt. Fortunately for us we had several credit cards with a zero balance to use but it’s just borrowing from one to pay another. It makes for many sleepless nights. Retirement isn’t so golden right now.