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U.S. credit card balances hit $1.29 trillion, New York Fed says
CNBC reported that New York Fed data showed U.S. credit card balances rose $22 billion in the third quarter to a record $1.29 trillion, with total household debt at $19.1 trillion.
- New headline Was: “Credit card debt climbs to a record $1.29 trillion, New York Fed research finds”
- Our desk filed its story
U.S. credit card balances rose $22 billion in the third quarter to a record $1.29 trillion, according to the Federal Reserve Bank of New York's household debt report as described by CNBC on Tuesday1.
Balances were 4.2% higher than a year earlier, CNBC reported1. Total household debt, including mortgages, auto loans and student loans, increased $334 billion in the July-to-September period to a record $19.1 trillion1.
New York Fed researchers said on a press call that overall debt has been growing and that the figures reflect financial hardship1. CNBC said the researchers wrote that a larger share of new cards has gone to borrowers with lower incomes and credit scores, and that those accounts now show higher distress1. After issuers loosened lending standards during the Covid pandemic, delinquency rates rose in later years, the researchers said on the call, according to CNBC1.
A separate TransUnion quarterly report, as cited by CNBC, put the average credit card balance per consumer at $6,678, up 2.4% from a year earlier, with the number of people with cards at 178 million, up 2% from 174.8 million1. LendingTree data cited in the article put the average interest rate on a new credit card offer at about 24%1.
"Credit cards continue to be one of the most expensive ways to borrow," TransUnion senior vice president Charlie Wise said, according to CNBC1.
CNBC also quoted the New York Fed as saying high inflation and rising borrowing costs have squeezed consumers, with inflation outpacing wage growth for low-income brackets1. The Bureau of Labor Statistics reported Tuesday that costs for goods and services rose more than expected in October, CNBC said1. Ted Rossman of nonprofit credit counselor Money Management International told CNBC that higher prices and rates have pushed more people into debt and that, while the growth rate of balances is slowing, damage has already been done for household finances1.
CNBC noted the reports arrived after Democrats' midterm results and quoted Century Foundation chief economist Kyle Moore on voter dissatisfaction with the U.S. economy1. The New York Fed's underlying tables were not independently reviewed for this filing beyond CNBC's account1.
