Home Markets Credit card balances jump 10% to a record $6,360 as delinquencies rise

Credit card balances jump 10% to a record $6,360 as delinquencies rise

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Here's why Americans can't keep money in their pockets — even when they get a raise

Credit card debt has notched another new high.

Americans now owe $1.13 trillion on their credit cards, the Federal Reserve Bank of New York reported Tuesday.

Balances jumped 10% from a year ago, according to a separate quarterly credit industry insights report from TransUnion, with the average balance per consumer hitting $6,360, also a historic record.

“Consumers are just spending more,” said Charlie Wise, senior vice president of global research and consulting at TransUnion. “Even though the inflation rate is down, that doesn’t mean prices are coming down.”

Prices are still rising, albeit at a slower pace than they had been.

The consumer price index — a key inflation barometer — has fallen gradually from a 9.1% pandemic-era peak in June 2022 to 3.4% in December 2023.

Meanwhile, households continue to show signs of strain — more cardholders are carrying debt from month to month or falling behind on payments.

Credit card delinquency rates jumped across the board, the New York Fed and TransUnion found. Credit card delinquencies surged more than 50% in 2023, the New York Fed reported. According to TransUnion’s research, “serious delinquencies,” or those 90 days or more past due, reached the highest level since 2009.

“Consumers are struggling with their payments,” Wise said. “I think we will continue to see those delinquencies tick up.”

More from Personal Finance:
Credit card debt hits a ‘staggering’ $1.13 trillion
Americans can’t pay an unexpected $1,000 expense
Why workers’ raises are smaller in 2024

‘It’s not all bad news’

Millennials increasingly lean on credit

How to tackle credit card debt

“My favorite tip is to sign up for a 0% balance transfer credit card,” Rossman said.

Cards offering 12, 15 or even 21 months with no interest on transferred balances are out there, he added, and “these allow you to consolidate your high-cost debt onto a new card that won’t charge interest for up to 21 months, in some cases.”

Borrowers may also be able to refinance into a lower-interest personal loan. Those rates have climbed recently, as well, but at just under 12%, on average, are still well below the current credit card average.

Otherwise, ask your card issuer for a lower annual percentage rate. In fact, 76% of people who asked for a lower interest rate on their credit card in the past year got one, according to a LendingTree report.

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