US credit card debt stands at a record of nearly $1 trillion. 5 moves to pay down your balance

Collectively, Americans owe nearly $1 trillion on credit cards.

Total credit card debt stood at $986 billion at the start of 2023, unchanged from the record hit at the end of 2022, according to a new report on household debt from the Federal Reserve Bank of New York.

Typically, balances fall in the beginning of the year as borrowers start paying down debt after the peak holiday shopping season. “This is the first time in 20 years we are not seeing a decrease,” according to New York Fed researchers, citing inflation and a higher cost of living.

Credit card balances are up almost 20% from a year ago, according to a separate quarterly credit industry insights report from TransUnion.

The average balance rose to $5,733 over that same period, TransUnion found.

“As inflation rose to near 40-year-high levels, many consumers have used credit to help manage their budgets, leading to record- or near-record high balances,” said Michele Raneri, TransUnion’s vice president of U.S. research and consulting.