Credit card debt in the U.S. hit a record high in Q2, and Americans are paying the price — in interest.
The Federal Reserve Bank of New York reported Tuesday that credit card debt skyrocketed to $1.14 trillion as of Q2 2024. That’s a $27 billion increase from the previous quarter and a $111 billion jump from the same time last year. The report was representative of the nation, based on a national sample of data drawn from the New York Fed’s Consumer Credit Panel.
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Meanwhile, TransUnion’s second-quarter Credit Industry Insights Report released Thursday shows that the average American now has an average of $6,204 in credit card debt, or 6% more than last year’s average of $5,947.
TransUnion reported 545 million credit cards in use in the U.S. in Q2 2024.
Paul Siegfried, senior vice president and credit card business leader at TransUnion, says there’s a difference between how higher-risk and lower-risk borrowers use their credit cards.
“Higher-risk [borrowers] seem to be experiencing more significant inflationary pressures and as such, relying on their cards more, evident in increasing balances and higher utilization,” he stated.
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At the same time, TransUnion found that credit card originations, or approval for new credit cards, mortgages, and loans, was down 7% year-over-year.
“Originations will likely continue to decline for mid-tier and worse consumers as issuers look to less risky borrowers,” Siegfried said.
According to a Forbes Advisor’s report, the average credit card annual percentage rate (APR) is around 27.62% this week.
