US consumer credit card debt hits $1 trillion milestone.
U.S. Credit Card Debt Surpasses $1 Trillion, Reaching Record High
The Federal Reserve Bank of New York recently released its quarterly report on household debt and credit, revealing a significant milestone in U.S. consumer credit card debt. The total debt has now exceeded $1.03 trillion, marking the highest it has ever been.
While this news may raise concerns, it’s important to note that the debt-to-GDP ratio remains relatively low at 3.7%. However, the increase is still noteworthy, with credit card debt rising by $45 billion or 4.6% from the previous quarter.
Experts Warn of Potential Consequences
Economists have been closely monitoring these figures, and the recent trend is causing some alarm. Last year, credit card debt saw a staggering 17% increase, amounting to a jump of $145 billion. This quarter’s results have failed to show the usual decrease, raising concerns about the future trajectory of credit card balances.
According to Matt Schulz, chief credit analyst at LendingTree, “That lack of a decrease may not bode well for Americans’ credit card debt numbers for the rest of the year. Thanks to rising interest rates, stubborn inflation, and other economic factors, it’s likely just a matter of time before credit card balances surpass trillion for the first time since the New York Fed began tracking.”
Implications for U.S. Household Debt
With credit card debt reaching this record high, the total U.S. household debt now stands at a staggering $17.06 trillion. This milestone serves as a reminder of the importance of responsible financial management and the need for individuals to stay vigilant in managing their credit card balances.
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