Americans borrowed more than ever on their credit cards in the last quarter, the New York Federal Reserve Bank said on Tuesday, with balances surpassing $1 trillion for the first time even as overall household debt loads were largely unchanged.
Credit card balances rose by $45 billion to $1.03 trillion in the second quarter, the regional Fed bank said in its latest quarterly household debt and credit report, reflecting robust consumer spending as well as higher prices due to inflation, researchers said.
Household debt ticked up 0.1% to $17.06 trillion, as mortgage balances – the biggest portion, and typically the biggest driver, of overall household debt – were largely unchanged.
Meanwhile, credit card delinquencies are at an 11-year high, as measured using a four-quarter average, the data showed.
“The rich rules over the poor,
And the borrower is servant to the lender.” Proverbs 22:7
But the quarter-to-quarter trend appeared less alarming, with New York Fed researchers noting a leveling out near pre-pandemic levels in the most recent two quarters.
“Despite the many headwinds American consumers have faced over the last year – higher interest rates, post-pandemic inflationary pressures, and the recent banking failures – there is little evidence of widespread financial distress for consumers,” New York Fed researchers wrote in a blog accompanying the data release.
Though rising balances will challenge some borrowers, and student loan borrowers may be squeezed as student loan repayments resume this fall, they wrote, “household credit shows some early signs of stabilizing at pre-pandemic health, albeit with higher nominal balances.”
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2nd Coming, global government, Jan Markell, Michele Bachmann
