U.S. Credit Card Debt Surpasses $1 Trillion

Lavina Daryanani
Source: Pixabay

The credit card debt in the U.S. has surpassed the $1 trillion benchmark, creating a new all-time high. The figure has reached a new high between April-June 2023. The previous debt ceiling stood at $986 million.

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It’s a tough time: Analyst

The $1 trillion figure marks a sharp trend reversal from three years ago when households were instantly paying credit card debt with the stimulus payments they got during the pandemic. Matt Schulz, the Chief LendingTree Credit Analyst, recently said in an interview,

“I think it’s fairly clear that what we’re seeing now is becoming more and more about people struggling in the face of ongoing inflation and seemingly constant rising interest rates. It’s a tough time.”

The average credit card annual percentage rate scripted a new record high of 20.53% last week. The previous record of 19% was attained in July 1991. According to official numbers, the American economy has remained resilient, and in fact, bounced back quite swiftly over the last couple of years. Inflation numbers have been falling month over month. However, with the interest rates rising, the aggregate balance on credit cards has sharply risen. Schultz said that 2023 has been a ”really rough year” for credit card holders. He added,

“Even though the Fed seems to be taking their foot off the gas with interest rates, the unfortunate reality is credit card holders shouldn’t expect things to get a ton better anytime terribly soon, just because interest rates aren’t going down anytime soon.”

Presidential candidate, Robert F. Kennedy Jr. recently spoke about how America is witnessing the greatest credit card debt in history. He pointed out that for most Americans, the American dream has turned into an “American nightmare.”

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