Credit card balances often misrepresent borrowing as they mainly indicate spending. Despite being a primary consumer payment method in the US, many pay off their full balances monthly. In 2022, credit card transactions reached $5.8 trillion, up 18% YoY due to increased spending on travel and services amid inflation. Q3 saw credit card balances rise by $48 billion to $1.08 trillion, a 16.6% YoY increase, driven by elevated spending on services and rising prices.
Credit card balances are among the most misreported data points out there. They’re largely a measure of spending rather than borrowing. Credit cards are the dominant consumer payments method in the US.
Many people with a balance on their statement (example $2,000) pay that… pic.twitter.com/38WVB8D9qv
— Wall Street Mav (@WallStreetMav) November 9, 2023