Credit card debt climbs to a record $1.29 trillion, New York Fed research finds

Total household debt balances rose 1.8% to $19.1 trillion in the third quarter, an increase of $334 billion from the second quarter, according to the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit released Tuesday. The share of overdue consumer loans edged up to 5% from 4.7% in the prior quarter, a level the New York Fed said is consistent with pre-pandemic conditions and well below financial crisis peaks. Mortgage debt, the largest component, increased by $257 billion to $13.4 trillion. Credit card balances climbed $22 billion to $1.3 trillion, with CNBC reporting the figure as a record $1.29 trillion. Auto loan balances rose $21 billion to $1.7 trillion. Home equity lines of credit grew by $23 billion, the largest quarterly increase since 2005 and the 18th consecutive quarter of growth.

Delinquency trends were mixed. The share of mortgage balances more than 90 days overdue rose to 1.13%, the highest since the first quarter of 2018, though transitions into serious delinquency remained low by historical standards. Early delinquency transitions increased for mortgages and auto loans, while serious delinquency transitions improved for credit cards and student loans. Student loans more than 90 days past due stood at 10.9% of balances, up from 10.6% in the second quarter. New York Fed researchers noted that credit card delinquency rates "rose sharply" during the 2022-2024 period, particularly for cards issued during the pandemic to borrowers with lower incomes and credit scores, but said "absent macroeconomic shocks, we anticipate that new credit card delinquencies will likely continue to see signs of improvement." Donghoon Lee, economic research adviser at the New York Fed, stated that "although delinquency transition rates for housing debts have crept up, the overall credit quality of these loans remains strong."

Separate data from the Urban Institute showed 5.8% of Americans had delinquent credit card debt with a median late amount of $680, up from 4.3% in August 2019. About 24% of consumers with a credit file had debt in collections, down from roughly 30% pre-pandemic, though reporting delays may factor in. Residents of majority non-white ZIP codes were 50% more likely to have debt in collections than those in majority white areas. The reports came as consumer price data showed core inflation rose 0.3% in October, exceeding estimates for the third straight month.