Americans borrowed more than ever on their credit cards in the last quarter, the New York Federal Reserve Bank said on Tuesday, with balances surpassing $1 trillion for the first time even as overall household debt loads were largely unchanged, Reuters reported. Credit card balances rose by $45 billion to $1.03 trillion in the second quarter, the regional Fed bank said in its latest quarterly household debt and credit report, reflecting robust consumer spending as well as higher prices due to inflation, researchers said. Household debt ticked up 0.1% to $17.06 trillion, as mortgage balances — the biggest portion, and typically the biggest driver, of overall household debt — were largely unchanged. Meanwhile, credit card delinquencies are at an 11-year high, as measured using a four-quarter average, the data showed. But the quarter-to-quarter trend appeared less alarming, with New York Fed researchers noting a leveling out near pre-pandemic levels in the most recent two quarters. Though rising balances will challenge some borrowers, and student loan borrowers may be squeezed as student loan repayments resume this fall, they wrote, "household credit shows some early signs of stabilizing at pre-pandemic health, albeit with higher nominal balances." Student loan balances declined by $35 billion to $1.57 trillion in the second quarter, the data showed. New York Fed researchers attributed the decline to the timing of the academic year, as well as to some small forgiveness programs kicking in.
