Credit card debt has reached an all-time high.
The Federal Reserve Bank of New York released new data showing that credit card debt currently sits at $1.03 trillion. This is up 4.6% from $986 billion in the first quarter, per the report, and the highest in recorded history American history.
This highlights the effect ballooning inflation has had on Americans.
“Despite the many headwinds American consumers have faced over the last year — higher interest rates, post-pandemic inflationary pressures, and the recent bank failures — there is little evidence of widespread financial distress for consumers,” NY Fed researchers said a blog post in response to the report.
The number of credit card accounts jumped to 578.35 million from 5.48 million in the quarter, and the credit limit increased by $9 billion to $4.6 trillion.
“Credit card balances saw brisk growth in the second quarter,” said Joelle Scally, regional economic principal within the Household and Public Policy Research Division at the New York Fed. “And while delinquency rates have edged up, they appear to have normalized to pre-pandemic levels.”
As previously reported by ESSENCE, in November, food saw 10.6% price increase across the board, with costs rising 12% and eatery menus seeing an uptick of 8.5% according to the Bureau of Labor Statistics said Tuesday. General inflation now sits at 7.1%.
To put things into context, food items like eggs cost nearly $7 per carton on average, whereas last year they were half the price. According to CNN, “food prices are affected by a number of factors, including extreme weather, diseases impacting crops and livestock, supply chain complications and geopolitical unrest including the war in Ukraine. That makes it more difficult for the US government to use tactics like raising interest rates to moderate food prices.”
Overall, total household debt increased over the last three months of 2022, jumping 2.4% to nearly $17 trillion, the New York Fed found, as reported by ABC News.
“Rising balances may present challenges for some borrowers, and the resumption of student loan payments this fall may add additional financial strain for many student loan borrowers,” NY Fed researchers wrote in the blog. “Even so, thus far, household credit shows some early signs of stabilizing at pre-pandemic health, albeit with higher nominal balances.”