U.S. credit card balances reached a record $1.29 trillion in the third quarter, rising $22 billion from the previous quarter and 4.2% from a year earlier, according to the Federal Reserve Bank of New York. The figures point to continued borrowing as households face elevated prices and financing costs.
Total household debt, including mortgages, auto loans and student loans, increased by $334 billion during the July-to-September period to $19.1 trillion. New York Fed researchers said the expansion reflected financial hardship among some borrowers.
A separate TransUnion report found that the average credit card balance per consumer rose 2.4% from a year earlier to $6,678. The number of consumers with credit cards increased to 178 million, up from 174.8 million. Credit cards remain accessible compared with some other borrowing options, but carry substantial costs.
The average interest rate on new credit card offers was approximately 24%, according to LendingTree. Actual rates vary by issuer, card type and borrower creditworthiness. TransUnion executive Charlie Wise described credit cards as among the most expensive borrowing options.
New York Fed researchers also reported that a growing share of new accounts had gone to consumers with lower incomes and credit scores. Those accounts were showing greater distress. Researchers linked subsequent increases in delinquency to looser lending standards during the pandemic and pressure from inflation and higher borrowing costs.
Rising costs for essentials, including groceries and gasoline, have added to household budget pressures. The article also cited an October inflation report showing prices increased more than expected. For lower-income households, New York Fed researchers said, inflation had outpaced wage growth.
Although credit card balance growth has slowed, credit counselor Ted Rossman said accumulated debt continues to weigh on household finances. Together, the reports describe record borrowing levels alongside persistent affordability pressures and uneven financial conditions among consumers.