Credit card debt hits record high of $1.23 trillion as economic inequality widens
Americans’ credit card balances soared to a record $1.23 trillion in the third quarter, an increase of $24 billion from the previous quarter.
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American consumers are paying off their credit cards at levels not seen since the days of the Great Recession.
About 13% of credit card balances nationwide were at least 90 days past due in the first quarter of 2026, according to a New York Fed report.
The numbers haven’t been this high since 2011, when the country was recovering from the 2008 financial crisis.
National credit card balances have reached $1.25 trillion, just below historic peaks.
Credit experts say the numbers suggest a small but growing percentage of U.S. consumers are stuck in a credit card debt hole from which they can’t easily climb out.
“This shows that some consumers are becoming increasingly vulnerable,” said Grace Zwemer, U.S. economist at Oxford Economics. “Rather than new consumers becoming delinquent, already delinquent consumers become more delinquent.
Not long ago, credit card debt was on the decline.
A few years ago, there weren’t many credit card problems in America. The nation’s overall card balances actually declined throughout much of 2020 and 2021 as consumers weathered the coronavirus pandemic and cashed their federal stimulus checks.
Credit card debt rose again in 2022 and 2023 as inflation soared to levels not seen in 40 years and interest rates rose.
Nationwide card balances will exceed $1 trillion in early 2023. The portion of balances past due 90 days or more, a sign that cardholders are delinquent, rose from 8% in Q2 2023 to 10.7% in Q1 2024 and 12.3% in Q1 2025.
The delinquency rate is now nearing its Great Recession peak of 13.7% in early 2010.
“There is no question that we are on an alarming trajectory,” said Odyseas Papadimitriou, founder and CEO of personal finance site WalletHub.
WalletHub reports that the average household carries $11,169 in credit card debt.
Cardholders suffer from inflation and interest rates
Cardholders continue to suffer from a troubling combination of inflation and rising interest rates.
Lana Rindge, a 29-year-old podcaster, has run into credit card debt three times in the past 10 years. I recently had $40,000 in debt on six cards.
“Inflation has gone up…and the cost of everything has gone up,” she said in Bankrate’s 2026 Credit Card Debt Report. “I didn’t make any adjustments to my cost of living or my lifestyle.”
Average credit card interest rates jumped from 14.6% in February 2022 to a peak of 21.8% in August 2024. Card interest rates remain high, averaging 21% in February 2026.
Credit experts say the increasing rate of past due debts indicates that some cardholders are falling behind on their cards and may not be able to catch up.
“This shows the fact that when people are in trouble, there is no option to get out of it,” Papadimitriou said.
Half of American credit card holders are doing well
This crisis is unfolding at a time when millions of Americans with credit cards are doing just fine.
About half of all cardholders carry a monthly balance. The other half is paying off the card every month. That means you’re not paying double-digit interest on the debt you incur.
“Many people pay on time, but there are also many people who are extremely late,” said Ted Rothman, principal analyst at Bankrate. “It’s not a big, evil, scary debt if you can pay it off every month and earn free miles.”
Rothman theorizes that high delinquency rates probably represent a relatively small number of consumers with balances large enough to not easily repay them.
“You probably won’t be more than $100 delayed by 90 days,” he said.
A report from the Federal Reserve Bank of Philadelphia says that even though the amount of delinquent cards has increased, the number of delinquent accounts has remained relatively stable.
Auto loan delinquencies hit record high
Credit cards aren’t the only category of debt plaguing American consumers.
The percentage of auto loan debt that is 90 days or more past due reached 5.6% in early 2026, the highest on record.
Car prices have increased significantly in recent years, and so have car loan interest rates. As a result, consumers borrowed more money and took longer to pay it back.
By contrast, mortgage delinquency rates are nowhere near the levels reported during the Great Recession, a crisis caused by the housing market meltdown.
Rothman and other experts don’t see any similarities between the current credit crunch and the 2008 crisis. Credit card delinquencies are increasing, but at a slower pace than they were a few years ago. Although the rate of new delinquencies on credit card accounts has increased, it has remained stable.
“I don’t think the situation is even close to being as dire as it was leading up to the Great Recession,” Papadimitriou said.
Tips for paying off credit card debt
If you’re struggling with credit card debt, here are some tips to get rid of it.
zero annual percentage rate credit card
One of the best ways to pay off a high-interest credit card is to use another credit card that doesn’t charge any interest.
Zero APR cards allow consumers to make purchases without paying interest during a 12-, 18-, or even 24-month promotional period.
Once the promotion ends, interest will only accrue on the debt remaining on the card.
It’s a “great tool,” says Bankrate’s Rothman. “Especially if you have a good credit score, especially if your debt is less than $5,000 or $6,000.”
nonprofit credit counselor
Cardholders with bad credit or high balances may want to consider nonprofit credit counseling services. A credit counselor can help you consolidate your debt and negotiate lower interest rates to help you pay it off.
“They can often negotiate interest rates in the 6% or 7% range over four or five years,” Rothman said. “It’s within the reach of almost everyone. You don’t need a lot of credit. You don’t need a huge income.”
