The US credit card debt has reached a record high of $1.21 trillion, according to the New York Federal Reserve. The total household debt, including mortgages, auto loans, student loans, and credit cards, has increased to $18.04 trillion. This represents a growth of $93 billion in the last three months of 2024, with half of that increase attributed to new credit card debt.
Researchers attribute the rise in credit card debt to holiday shopping at the end of the year, as well as high interest rates. However, they note that income levels have been increasing despite the growing debt, which is a positive sign for the economy’s health.
Delinquencies on credit cards and auto loans also increased during the fourth quarter. Auto loan delinquency rates remain elevated, with higher new and used car prices post-pandemic being a key factor. Mortgage delinquency rates are similar to pre-pandemic levels, but high auto loan delinquency rates persist across all income levels and credit scores.
As consumers start paying down their holiday debt at the beginning of the year, researchers expect balances to decline.
Source: https://abcnews.go.com/Business/americans-credit-card-debt-reaches-new-record-high/story?id=118788620