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Credit card debt overview:
- Who: The New York Fed released its quarterly household debt and credit report last week.
- Why: The report revealed American credit card balances surpassed $1 trillion for the first time.
- Where: The credit card balances include nationwide consumer debt.
- What are my options: Credit Karma offers banking options like checking and savings accounts and credit cards.
American credit card balances surpassed $1 trillion dollars for the first time, rising by $45 billion to reach $1.03 trillion in the second quarter, according to the New York Federal Reserve’s latest quarterly household debt and credit report.
Researchers are attributing the growing credit card debt to vigorous consumer spending and higher prices on account of inflation, Reuters reports.
Credit card delinquencies are the highest they have been in 11 years, according to the report, which measured the data using a four-quarter average.
Household debt rose 0.1% to a total of $17.06 trillion, meanwhile, with the New York Fed finding mortgage balances remained mostly the same, Reuters reports.
“After a sharp contraction in the first year of the pandemic, credit card balances have seen seven quarters of year-over-year growth,” the New York Fed says in a blog post it released alongside with the report.
Little evidence of ‘widespread financial distress’ for consumers, New York Fed says
The credit card debt increase was the largest of all debt types, according to the New York Fed, which noted credit card balances are at “historic highs” and that there are more than 70 million more credit card accounts open now than in 2019, prior to the pandemic.
Despite this, the New York Fed says in its blog post that “there is little evidence of widespread financial distress for consumers” despite the challenges they have had to face such as higher interest rates and “post-pandemic inflationary pressures.”
The New York Fed also noted a series of recent bank failures have put pressure on consumers and that rising account balances “may present challenges for some borrowers.”
“Even so, thus far, household credit shows some early signs of stabilizing at pre-pandemic health, albeit with higher nominal balances,” the New York Fed writes.
In February, the New York Fed revealed in its prior Quarterly Report on Household Debt and Credit that American debt had increased to a record $16.9 trillion during the fourth quarter of 2022.
Are you concerned with rising credit card debt? Let us know in the comments.
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3 thoughts onU.S. credit card debt surpasses $1 trillion
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I’ve received a letter stateing my personal information was compromised/ breached through there company. Question is, can I sue them directly for allowing my information to be compromised?
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