Is Credit Card Debt on the Rise?

is credit card debt on the rise

Report finds that Americans are struggling with credit card debt.

According to a new report from the Federal Reserve Bank of Philadelphia, Americans are struggling with their credit card usage. The study found that credit card performance — which includes late payments, total balances, and credit utilization — is cratering. 

Credit Card Debt Findings

The report showed that between October and December of 2023, the share of cardholders who were behind on payments by at least 30 days was at an all-time high. The percentage of people who were even further behind on payments was also at a record high. Cardholders who are making payments aren’t doing much to help themselves either. About 11 percent of cardholders said they were only making the minimum payments on their balances. Yes, that’s another all-time high. 

Credit Score Dip

Unsurprisingly, because people are struggling with their credit cards, credit scores are suffering as well. During the last few months of last year, about one million consumers became “subprime borrowers” — people with credit scores of 600 or below. 

Putting Numbers into Perspective

There are reasons why this report found that people are struggling with their credit cards.

  • First of all, the time frame used in the study was over the holidays, when credit card usage typically spikes.
  • Beyond that, inflation and high-interest rates are making things hard on Americans.
  • When everything is expensive, people may lean more on credit cards. 

Do One Thing: If you have credit card debt, pay down the card with the highest interest rate first.

Chris O'Shea

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