Credit card debt has reached $1.08 trillion in US, an all time high.

The burden of credit card debt is on the rise.

As of Tuesday, Americans collectively owe $1.08 trillion in credit card debt, as reported by the Federal Reserve Bank of New York.

According to a quarterly report from TransUnion, credit card balances have surged by 15% compared to a year ago. The average balance per consumer has reached $6,088, marking the highest point in the last decade.

Persistent inflation is placing increased financial strain on households, leading more cardholders to carry debt from month to month or face challenges in meeting payment deadlines.

Both the New York Fed and TransUnion observed a rise in credit card delinquency rates across the board.

“These are consumers who are struggling to afford their everyday expenses,” commented Charlie Wise, Senior Vice President of Global Research and Consulting at TransUnion. “They’re trying to keep the house of cards from collapsing.”

Furthermore, Wise noted that not only are balances higher, but the cost of servicing debt on these cards has significantly increased.

The recent series of 11 rate hikes by the Federal Reserve, including four in 2023, has caused credit card rates to spike by over 5%. Given the variable nature of most credit card rates, they are directly influenced by the Fed's benchmark. As the federal funds rate climbed, so did the prime rate, subsequently impacting credit card rates.