Rising Credit Card Balances Drive US Household Debt to Record $17 Trillion

U.S. household debt balances hit a record of $17 trillion during the first quarter of 2023, up 0.9% from the fourth quarter of last year, according to the Federal Reserve Bank of New York.

The Details: Increases in debt were seen across multiple categories, from mortgages to auto loans and student loans. Credit card debt stood at $986 billion, mostly unchanged from Q4 2022, but credit card balances are up almost 20% from a year ago, according to TransUnion. The number of credit card accounts also rose 1.5% from the fourth quarter to the first quarter of this year, and has increased 6.7% over the past year to roughly 573 million.

For Context: 2023's first quarter was the first time credit card debt didn’t decrease during the January-March period since tracking began in 2003, and consumer debt has risen by $2.9 trillion since the end of 2019. Sources across the spectrum suggested inflation could be a factor, since many items bought on credit this year might be more expensive than last year. And amid continued interest rate hikes by the Federal Reserve, the average credit card rate is now more than 20%, a record high.

How the Media Covered It: Sources across the spectrum framed the data as concerning by highlighting how credit card debt typically falls in the first quarter as consumers pay off holiday-season expenses. A Fox Business (Lean Right bias) headline said debt "hit record $17T last quarter as inflation squeezes Americans."