Ramsey Solutions personality Jade Warshaw breaks down the latest economic data that shows consumers are racking up credit card debt amid a surge in spending.
Americans' credit card debt continues to rise, hitting a new record at the end of September, according to a new report from the New York Fed.
Total credit card debt rose to $1.17 trillion in the third quarter, an increase of $24 billion from the previous quarter, according to the report. This is the highest level on record for Fed data since 2003.
Credit card debt from U.S. consumers has increased by billions of dollars as inflation and interest rates rise, hitting another record high last quarter. (Photo by Frederick J. Brown/AFP via Getty Images/Getty Images)
According to the report, in addition to outstanding home loans ($12.59 trillion), auto loans ($1.64 trillion), and student loans ($1.61 trillion), total household debt also hit a record high of 17.94 trillion. reached a billion dollars.
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“Household budget balances continue to increase in nominal terms, but income growth is outpacing debt,” said Dong-hoon Lee, economic research advisor at the New York Fed. “Still, even though delinquency trends have eased to some extent this quarter, rising delinquency rates highlight the stress that is causing many households.”
Americans' credit card debt hit another all-time high last quarter at $1.17 trillion. (Photo illustration: Justin Sullivan/Getty Images/Getty Images)
While still above pre-pandemic highs, the credit card delinquency rate was 8.8% last quarter, down slightly from 9.1% the previous quarter. Delinquency rates for auto loans and home loans both worsened slightly, rising by 0.2 percentage points and 0.3 percentage points, respectively.
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In a conference call following the release of the report, researchers at the New York Fed pointed to increases in overall debt balances, sustained and “concerning” increases in auto loan and credit card delinquencies, and how stress and high delinquency rates are contributing to stress and high delinquency rates. Discussions included whether this was concentrated among young people. borrower.
Vehicles for sale at the AutoNation Honda dealership in Fremont, CA on Monday, June 24, 2024. Auto loan delinquencies increased slightly in the third quarter. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
One researcher said, “During the past few years, there has been a marked increase in delinquencies, especially for credit cards and car loans.'' “This is something we have been pointing out as a reason for concern, and it is something to note.”
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They noted that consumers are paying more on credit cards and car loans, partly due to inflation and rising interest rates.
