Biggest credit card balance spike in 20 years
November 28, 2022
Nov. 28 is Cyber Monday. It’s one of the busiest shopping days of the year, which means many buyers will add to their credit card debt. The impact of doing so will be greater this year. Credit card debt increased 15 percent year over year, marking the largest one-year increase in 20 years, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit.
By the numbers:
- Credit card balances grew $38 billion from the second quarter, comprising 11 percent of the overall increase in household debt ($351 billion).
- Credit card holders between the ages of 30 and 59 have balances approaching fourth-quarter 2019 levels, according to the report.
- Borrowers under the age of 30 have balances that are above where they were pre-pandemic.
- Borrowers in the lowest-income households have balances that surpass pre-pandemic levels.
- Delinquent payment rates are rising in households with lower incomes.
Why it matters
Credit cards are the most prevalent type of debt in the U.S., and more people are relying on credit cards to get by. Doing so has pushed total credit card debt to $930 billion in the third quarter, just shy of an all-time record, according to the Federal Reserve Bank of New York. The spike during a period of decades-high inflation is adding pressure on younger borrowers and others struggling to keep up with day-to-day expenses.
