US Credit Card Balances and Delinquencies Grow

Credit card balances increased by $48 billion to a record $1.08 trillion in Q3 2023.

This increase represents a 4.7% increase from Q2 2023 and a $154 billion, or 16.6% increase from Q3 2023, according to the Quarterly Report on Household Debt and Credit issued by Federal Reserve Bank of New York’s Center for Microeconomic Data. The year-over-year increase is the largest since the Fed started tracking this data in 1999. Aggregate limits on credit card accounts increased by $113 billion, a 2.5% increase from the previous quarter.

There is evidence that consumers are finding it more difficult to service their debt as aggregate delinquency rates at the end of September rose to 3.0% of outstanding debt in some stage of delinquency, up 0.4% from Q2 2023. Almost 9.5% of credit card balances were more than 90 days past due in Q3 2023, up from 8% in Q2 2023 and 7.6% in Q3 2022.

“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, Economic Research Advisor at the New York Fed. “The continued rise in credit card delinquency rates is broad based across area income and region, but particularly pronounced among millennials and those with auto loans or student loans.”

According to the Fed, credit cards are the most prevalent type of debt in the US. There are more than 500 million open accounts and close to 200 million Americans have at least one credit card. Half of all Americans adults have at least two cards.

For more information on this topic see this Press Release from the Federal Reserve and these articles from CNBC and the Wall Street Journal.

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