For the first time ever, according to the New York Federal Reserve report released on Tuesday, credit card debt has surpassed $1 trillion.
From April to June, total credit card debt leaped to $1.03 trillion. That is an increase of $45 billion, or 4.6% from the previous quarter. That is the highest level on record in Fed date going back to 2004.
With interest rates being as high as they are right now, it is concerning how often people are swiping their credit cards. The average annual percentage rate (APR), hit a new record at 20.33%. The old record was 19% in July of 1991.
Chief credit analyst at LendingTree Matt Schultz said, “One trillion dollars in credit card debt is staggering. Unfortunately, it is likely only going to keep growing from here.”
The resumption of student loan payments could have an impact on the debt number. Schultz explained saying, “Even as inflation has lingered and interest rates have risen, pushing card debt to record levels, Americans have generally done a good job paying their credit card bills on time. That may not last, however. The resumption of student loan payments will be a huge test for many cardholders, shrinking the amount they have to devote to paying off card debt and leaving some people simply unable to make minimum payments at all.”
To hear Tony Katz’s thoughts on the $1 trillion in debt, click the link below.
