Key facts
- US credit card debt reached $1.26 trillion between April and June.
- Last year's record for US credit card debt was $1.28 trillion.
- Delinquencies on credit card balances over 90 days past due have risen significantly.
- Overall consumer debt shows resilience.
- Homeowners with low fixed-rate mortgages contribute to consumer debt resilience.
- Persistent inflation is straining many consumers.
- Declining real wages are straining many consumers.
US credit card debt reached $1.26 trillion between April and June, a figure that approaches the record high of $1.28 trillion observed last year. This increase in credit card balances is occurring even as overall consumer debt levels demonstrate resilience. This broader resilience is significantly attributed to homeowners who benefit from low fixed-rate mortgages, providing a stable financial cushion.
However, beneath this generally healthy economic picture, significant strains are emerging for many consumers. Persistent inflation continues to erode purchasing power, while real wages have seen a decline. These economic pressures are particularly acute for individuals carrying other forms of debt, exacerbating financial difficulties and highlighting widening economic divides within the consumer base. Delinquencies on credit card payments, specifically balances over 90 days past due, have risen significantly, signaling increased financial distress.
The divergence in consumer financial health is becoming more pronounced. Those with substantial assets and fixed, low-cost debt obligations, such as homeowners with existing mortgages, are better positioned to weather the current economic climate. Conversely, consumers with variable debt or those more exposed to inflation without corresponding wage growth face increasing challenges in managing their financial obligations.