Report shows credit card debt is now the highest on record

WASHINGTON, D.C. — Credit card swipes are adding up nationwide.

The latest quarterly report from the Federal Reserve Bank of New York shows credit card debt is hitting a new record at $986 billion. Officials say this number surpasses the previous record of $927 billion, which was set right before the pandemic.

“People are spending so much more for gas and groceries and even other things like rent, which may not directly land on a credit card but there’s a spillover. More money going to that means less money for something else,” said Ted Rossman, senior industry analyst at Bankrate.

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In addition to high inflation, Rossman said more people are in debt overall.

“We found that 46% of credit card holders carry debt from month to month, and that’s up from 39% a year ago,” he said.

But Rossman said defaults are still low. He said that means people are still keeping up with their bills.

However, Rossman acknowledges this may not be the reality for every family.

“But we do worry about the cumulative effect that there is definitely a weight to this. That stacks up over time that if you’re carrying more debt, and if rates are up, it just becomes very persistent,” he said.

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Rossman suggests looking at your budget and making changes where you can to help bring down your debt.

“Things like earning more maybe through a side hustle or asking for a raise or switching jobs or selling stuff you don’t need or cutting your expenses,” said Rossman. “These are all levers that people can pull and you’re not limited to one either.”

Rossman said you can also consider getting a personal loan to pay off the debt. He said there are some nonprofit credit counseling agencies like Money Management International and GreenPath that can help you even if you don’t have a good credit score.