The New York Federal Reserve’s latest report reveals that consumers increased their credit card balances by $45 billion in the fourth quarter of 2023, with total household debt rising to $18.04 trillion. This surge is largely driven by a 48% increase in credit card debt, which now totals $1.2 trillion.
The pressures of new debt, combined with inflation and stagnant interest rates, pose a significant challenge for consumers struggling with their obligations. Delinquency rates have increased slightly from the previous quarter, with 3.6% of outstanding debt classified as delinquent. However, credit cards remain the most delinquent loan type, with 11.35% of balances over 90 days past due.
The report also highlights an increase in aggregate limits on credit cards, by $98 billion or 2%, which may be a response to consumers reaching their spending limits during the holiday season. A recent survey found that 41% of financially struggling cardholders often or always reach their limits, and 20% of households signaled they often bumped up against their spending limits.
As inflation continues to affect consumer spending habits, credit card interest rate charges are unlikely to decrease anytime soon, making it harder for consumers to manage their debt. The upcoming March Madness tournament may also be impacted by technological advancements, including AI-powered bracketology and virtual reality arenas.
Source: https://www.pymnts.com/consumer-finance/2025/holiday-hangover-card-delinquencies-hit-multi-year-high