The credit card debt held by US shoppers surpassed more than $1 trillion for the first time ever as high inflation continues to drive up costs, according to a report published on Tuesday by the New York Federal Reserve.
Credit card balances grew by $45 billion in the second quarter of this year — rising from $986 billion at the end of the first quarter to $1.03 trillion by the end of the most recent three-month period, the New York Fed data shows.
“One trillion dollars in credit card debt is staggering,” Matt Schulz, chief credit analyst at LendingTree, told Fox Business.
“Unfortunately, it is likely only going to keep growing from here. What’s driving it is inflation, higher interest rates and just generally how expensive life is in 2023.”
The report found that Americans held a total of 578.35 million credit card accounts — a 5.48 million increase from the end of the first quarter.
The credit card limits increased on aggregate by $9 billion to $4.6 trillion, according to the New York Fed.
The average interest rate on credit card balances are at a near-record 20.53%, according to Bankrate.
The report by the New York Fed also shows a slight uptick in total household debt, which increased by $16 billion in the second quarter.
Total household debt stood at $17.06 trillion by the end of the second quarter, the New York Fed said.
Auto loan balances also rose 4.3% in the second quarter, climbing $20 billion.
Student loan debt fell by $35 billion while mortgage balances were largely unchanged at $12 trillion.
Some analysts were less worried about the ramifications for the economy.
“I don’t doubt some people are using credit cards to make ends meet but the labor market is still very strong so I don’t think this is necessarily a sign the consumer is almost tapped out,” Bryce Gill, an economist with First Trust Advisors, told The Post.