US credit card debt climbs to $1.26tn, nearing last year’s record high 2026

US credit card debt has climbed to $1.26 trillion, nearing last year's record high, according to the Federal Reserve Bank of New York's latest report. The second quarter of 2026 saw a $21 billion increase, or 1.7%, from the previous quarter, signaling that Americans are carrying more debt into the summer months.

Key Findings from the Federal Reserve Report

The report, published on Tuesday, reveals that credit card balances are just shy of the all-time high of $1.28 trillion set last year. While mortgage and student loan balances saw slight declines, credit card debt continues to rise, driven by persistent inflation and everyday expenses.

Delinquency Rates on the Rise

One of the most concerning trends is the increase in credit card debt that is more than 90 days past due. This rate jumped from 7.6% in late 2022 to 12.8% early this year, a level not seen since the Great Recession. Although the pace of new delinquencies has stabilized, the overall share of household debt in delinquency fell slightly to 4.7% in Q2 from 4.8% in Q1.

Why Are Americans Carrying More Debt?

High inflation has made it harder for many households to maintain their standard of living. As Lucia Dunn, professor emerita of economics at Ohio State University, explains, "A lot of this is feeding your kids, going into stores, people buying their school supplies, the groceries, the baby formula, the diapers." Many consumers are forced to carry a balance because they are economically strapped.

Comparison of Credit Card Debt Metrics

How to Manage Your Credit Card Debt

If you're among the millions of Americans carrying a balance, it's crucial to take proactive steps. Here are some key takeaways:

• Create a budget to track your spending and identify areas to cut back.
• Pay more than the minimum each month to reduce principal faster.
• Consider a balance transfer to a lower-interest card.
• Negotiate with your credit card issuer for a lower rate.
• Seek credit counseling if you're struggling to make payments.

Expert Insights on Debt Management

Financial experts emphasize the difference between using a credit card for convenience and carrying a balance. Paying off your balance in full each month avoids interest charges, while carrying a balance can lead to a debt spiral. It's essential to understand the risks and take control of your financial health.

FAQ

Stay informed about your finances and take action to avoid falling into a debt trap. For more insights, explore our business section for expert analysis.

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