Credit Card Debt Sees Biggest Annual Spike Since 2001

Off the Charts: The Visual Says It All

A woman uses her credit card during a meal.

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Inflation has been surging this year, and so has our credit card debt.

Consumers’ credit card balances have risen 15% over the last year as of September—the biggest annual spike since 2001, the Federal Reserve Bank of New York said Tuesday. Total credit card debt stood at $930 billion at the end of the third quarter, up from $890 billion at the end of the second quarter and tying the record set in the fourth quarter of 2019 just before the pandemic struck. The report is based on a sample of financial data gathered from credit reporting agency Equifax.

Credit card debt has likely increased over the last year for the simple reason that we’ve been spending more—hardly a surprise since inflation is running near a 40-year high, economists at the Fed said in a blog post assessing the data. That’s the exact opposite of what happened during the earlier days of the pandemic, when consumers cut back spending and paid down their debts at a furious pace.

But this year, people had slightly more trouble paying down the extra debt. The number of accounts with payments more than a month overdue rose for the third quarter in a row, climbing to 5.24% from 4.76% in the second quarter. While that’s still below the pre-pandemic rate of 6.95%, Fed economists said the uptick is  worth monitoring in case it’s a sign of future economic trouble.

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  1. Federal Reserve Bank of New York. “Quarterly Report on Household Debt and Credit,” Page 2.

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