American Credit Card Debt Surpasses $1 Trillion

According to the Federal Reserve Bank of New York, Americans’ credit card debt levels have surpassed $1 trillion, a new record high.  During the second quarter of 2023, credit card debt grew $45 billion to $1.03 trillion.  Overall household debt has grown to $2.9 trillion since the end of 2019, largely driven by credit card debt and auto loan balances

Credit card debt balances have grown for five straight quarters, with the increases being at some of the largest rates in the past 20 years.  The average credit card charges a 20.53% interest rate, a near-record according to Bankrate.

As a result of the growing levels of debt, Bank of America reported approximately 16,000 individuals made a hardship withdrawal from their 401(k) account in the second quarter of 2023, an increase of 36% from the prior year’s second quarter.

LendingTree reported that consumers have been doing their best to cut spending while also dipping into their savings to cover large expenses that are outside of their budgets in recent months.