Total household debt has reached $17.06 trillion
In the second quarter of 2023, credit card balances surged to a notable $1.03 trillion, as indicated by the latest report from the Federal Reserve Bank of New York. This marked a substantial increase of $45 billion from the preceding quarter. Among all the various types of debt analyzed by the NY Fed, credit card debt experienced the most significant surge, contributing to its historical rise.
In its report, the NY Fed noted, “In comparison to other debt categories this quarter, credit card balances demonstrated the most significant deterioration in performance, following a period of exceptionally low delinquency rates during the pandemic.”
The escalation of credit card debt has also corresponded with an uptick in the number of individuals transitioning into credit card payment delinquency. Specifically, there was a 0.7 percentage point increase in the share of credit card debt transitioning into delinquency. Despite this rise, credit card delinquency rates appear to be stabilizing, aligning with their levels prior to the pandemic. Joelle Scally, a regional economic principal within the Household and Public Policy Research Division at the New York Fed, made note of this observation.
However, against the backdrop of persistent inflation, climbing interest rates, banking challenges, and other economic uncertainties, many Americans are still leaning on credit cards.
The NY Fed’s report highlighted, “Credit cards continue to be the most prevalent form of household debt and are consistently becoming even more widespread.”
According to a blog post by the NY Fed, there are now 70 million more active credit card accounts compared to 2019. Moreover, 69% of Americans possessed a credit card in the second quarter of 2023, marking an increase from 65% in December 2019 and 59% in December 2013.
In addition to the surge in credit card debt, total household debt rose to $17.06 trillion in the second quarter of 2023, a rise of $16 billion from the previous quarter.