Household debt hit record $16.9 trillion last quarter, as consumers loaded up their credit cards
Household debt hit record $16.9 trillion last quarter, as consumers loaded up their credit cards
ByAlicia Wallace, CNNWire
Thursday, February 16, 2023 12:12PM
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Rising interest rates mean your monthly credit card payments may rise sharply this year as annual percentage rates go up, increasing the amount of time it takes to pay off balances.
Rising interest rates mean your monthly credit card payments may rise sharply this year as annual percentage rates go up, increasing the amount of time it takes to pay off balances.
Americans continued to add to their debt at the end of last year – and grew their credit card balances at record rates, according to data released Thursday by the Federal Reserve Bank of New York.
NOTE: The video in the media player is from a previous report.
Total US household debt hit a record $16.9 trillion during the fourth quarter, an increase of $394 billion, or 2.4%, from the prior three-month period, according to the Fed’s latest Quarterly Report on Household Debt and Credit. While the lion’s share of the debt is attributable to mortgages, the report showed that not only are credit card balances swelling at record levels, delinquencies are on the rise as well.
Credit card balances increased nearly 6.6% to $986 billion during the quarter, the highest quarterly growth on record, according to New York Fed data that goes back to 1999. Year over year, credit card balances grew 15.2%.
The Federal Reserve has made sweeping rate hikes over the past 11 months in an effort to combat high inflation. Climbing interest rates have taken a toll on the housing sector: During the fourth quarter of last year, mortgage originations dropped to 2019 levels, according to the New York Fed report.
A historically strong labor market has helped to keep consumers spending; however, they’re doing so in an environment with historically high inflation and rising interest rates.
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American students collectively owe $1.76 trillion in college loan debt, GMA Digital reports.
“It’s triple trouble
