Household credit card debt crosses $1 trillion

In the recent period, American households are increasingly relying on credit cards for their expenses, resulting in a notable increase in credit card balances which reached $1.03 trillion during the second quarter. The Federal Reserve Bank of New York’s most recent report reveals these insights.

The Center for Microeconomic Data at the regional Federal Reserve indicated a modest rise in overall household debt in the second quarter, with a 0.1% climb from the first quarter of 2023, bringing the total to $17.06 trillion.

During the second quarter, credit card balances exhibited robust growth, surging by $45 billion or 4.6% compared to the first quarter. Joelle Scally, a regional economic principal at the Household and Public Policy Research Division of the New York Fed, noted the swift expansion of credit card balances and observed that delinquency rates have returned to levels seen prior to the pandemic.

According to the report, credit card accounts expanded by 5.48 million, totalling 578.35 million accounts. The aggregate limits on these credit card accounts also grew, reaching a combined total of $4.6 trillion following a $9 billion increase.

Due to declining mortgage origination and a deceleration in home prices, mortgage balances remained relatively stable and did not experience significant changes from the first quarter. As of the end of June, mortgage balances stood at $12.01 trillion.

Furthermore, the report revealed an increase of $20 billion in auto loan balances during the stated period.