U.S. Credit Card Debt Hits New High

U.S. credit card balances have climbed to a record $1.3 trillion, according to the latest household debt data, underscoring the growing role of revolving credit in consumer finances. The increase reflects steady spending alongside higher prices and borrowing costs, with the total number of open credit card accounts also reaching an all-time high.

In the fourth quarter alone, balances rose by $45 billion, bringing the year-over-year increase to $88 billion. While inflation has lifted transaction values, the figures also point to continued consumer resilience. Households are still spending on services and discretionary items, even as interest rates remain well above pre-pandemic levels.

Delinquencies Rise but Remain Contained

Credit quality indicators offer a more nuanced picture. Late payments have increased from the unusually low levels seen during the pandemic, but recent data suggests stabilization rather than acceleration.

Key trends include:

Serious delinquency rates, defined as balances more than 90 days past due, have risen but remain within historical norms.
Mortgage delinquencies are still relatively low, supported by strong home equity built up in recent years.
Employment conditions and remaining savings buffers continue to help many households manage higher borrowing costs.

At the same time, credit card interest rates are near multi-decade highs, increasing the long-term cost of carrying balances and raising the risk of strain if income growth weakens.

Overall

The data points to a mixed outlook. Consumer demand remains solid, but it is increasingly supported by credit rather than income alone. As inflation trends and interest rate expectations evolve, policymakers, lenders, and investors will be watching closely to see whether this expansion in credit use can continue without triggering broader financial stress.

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