Collectively, Americans now owe a record $1.17 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
Credit card balances rose by $24 billion in the third quarter of 2024 and are 8.1% higher than a year ago.
Despite that increase, credit card delinquency rates improved — with 8.8% of balances transitioning to delinquency over the last year, compared with 9.1% in the previous quarter, the New York Fed found. That change could “suggest that rising debt burdens remain manageable,” the New York Fed researchers said on a press call Wednesday.
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Meanwhile, credit cards have become one of the most expensive ways to borrow money.
Lower-income households, who had to stretch to cover price increases, have been hit especially hard after the Federal Reserve’s string of 11 interest rate hikes lifted the average credit card rate to more than 20% — near an all-time high.
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