The nation’s credit card debt stands at $986 billion, according to the Federal Reserve. The figure has climbed by $250 billion in two years.
Just two years ago, the national credit card narrative seemed headed in the opposite direction. Card balances declined from about $850 billion at the start of 2020 to less than $750 billion in the spring of 2021, a time of pandemic penny-pinching and federal stimulus-payment largesse.
Credit card debt rose by $86 billion in the fourth quarter of 2022, the largest increase on record.
The average credit card interest rate stands at 20.92 percent. Just last spring, the average card rate was 16.65 percent.
Credit card customers fall in two distinct camps: those who pay off their balance every month, and those who do not. For consumers who never carry a balance, the interest rate doesn’t really matter, because they aren’t paying it. But that group is shrinking. Forty-six percent of cardholders carry debt from month to month, up from 39 percent a year ago, Bankrate reports.
Credit card balances typically recede in the first months of the year, as consumers leverage holiday guilt, year-end bonus funds and early tax refunds to pay down their cards. This year, that didn’t happen: The national credit card debt remained essentially flat.
And analysts expect it to rise in the months to come.