- US credit card debt rose to $1.26 trillion, nearing last year's record level
- Credit card balances over 90 days late increased sharply to 12.8% in Q2
- New delinquencies remain steady but are still at elevated levels near 7%
US consumers are carrying a near-record $1.26 trillion in credit card debt, but the latest data from the Federal Reserve Bank of New York suggests the bigger concern is not simply the size of household debt. It is the widening gap between Americans who can comfortably repay their balances and those struggling to keep up.
Credit card balances increased by $21 billion in the second quarter, or 1.7% from the previous quarter, bringing total outstanding debt close to last year's record of $1.28 trillion.
The New York Fed's research also highlighted a sharp increase in credit card balances classified as late-stage delinquency, meaning payments are more than 90 days overdue. That share rose to 12.8% from 7.6% in the second quarter.
The jump has raised concerns about household finances. However, New York Fed researchers cautioned that the figure is a lagging indicator because it includes older charged-off debts that remain on credit reports.
More importantly, new credit card delinquencies have remained relatively steady, although they are still elevated. Over the past year, 6.97% of balances transitioned into delinquency, as per CNBC.
The figures illustrate what researchers describe as a “K-shaped” economy, where financial conditions are moving in different directions for different households.
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Around 175 million Americans have credit cards, and roughly 60% carry revolving balances rather than paying their bills in full each month.
Inflation remains an important factor. Consumers are increasingly turning to debt to manage the gap between household budgets and stubbornly high living costs. More than half, or 55% of consumers, carry credit card balances to pay for essential expenses, according to a separate Achieve survey.
The pressure could persist because credit card debt can become increasingly difficult to eliminate as interest charges accumulate. In the Achieve survey of 2,000 consumers conducted in June, 56% of borrowers said they would need at least six months to repay all their credit card debt.
The latest numbers therefore offer a deeper warning than a record-level debt figure alone. America's credit card problem is increasingly reflecting a divide in household financial resilience, with some consumers managing debt while others are using it simply to cover essential expenses.
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