The credit card debt in the United States has surpassed $1 trillion for the first time in history, according to a recent report by the Federal Reserve of New York.
The report states that the credit card debt in the second quarter of 2023 came to $1.03 trillion. This represents a 4.6% increase compared to the figure of $986 billion from the previous quarter.
The record debt is a result of increased spending by consumers as well as high prices. This also resulted in overall household debt rising by 1% to $17.06 trillion.
The New York Fed researchers also point out that the credit card balances have now seen “seven quarters of year-over-year growth.” This includes a 16.2 percent increase in the second quarter of this year compared to the same period in 2022.
The trend of opening new credit cards is also on the rise. There are currently 70 million more credit cards than there were in 2019, while the number of Americans that have a credit card is now 69% of the population. This is a 4% increase compared to late 2019.
“Despite the many headwinds American consumers have faced over the last year – higher interest rates, post-pandemic inflationary pressures, and the recent banking failures – there is little evidence of widespread financial distress for consumers,” the NY Fed concluded in their report.