Reports show debt grew to over $1 trillion in the second quarter, putting some in financial pressure before student loan payments began.
The Federal Reserve Bank of New York announced this month that Americans’ credit card balances grew rapidly in the second quarter, reaching more over $1 trillion.
According to New York Fed analysts in a blog post, credit cards are the most common household debt and increased the most. Researchers discovered that two-thirds of Americans held credit cards in the second quarter, up from 59% a decade earlier. They reported that card balances were more than 16% higher in the second quarter than a year earlier.
“It’s easy to become overwhelmed by credit card debt, and $1 trillion tells us that many Americans are making purchases with money they don’t have,” said Ben Alvarado, executive vice president and director of core banking at California Bank & Trust.
Consumers are utilizing credit cards more as costs rise. TransUnion reports that younger consumers are using credit to manage tighter finances. “Everybody is using credit a bit more to help make ends meet,” said TransUnion vice president of U.S. research and consulting Michele Raneri.