U.S. Credit Card Debt Hits 1.26 Trillion as Households Strain Under High Rates

Total U.S. credit card debt reached $1.26 trillion in the second quarter of 2026, a $21 billion increase from the prior quarter, according to the Federal Reserve Bank of New York's quarterly household debt report released in August 2026.

The figure remains slightly below the all-time record of $1.28 trillion set in the fourth quarter of 2025. Balances rose 1.7 percent during the second quarter, following a seasonal dip to $1.25 trillion in the first quarter.

About 60 percent of the 175 million Americans who hold credit cards carry revolving balances, leaving them exposed to compounding interest charges. Average interest rates stood at 20.94 percent for all accounts and 22.15 percent for accounts accruing interest as of the second quarter.

Economists attribute the debt accumulation to a K-shaped economy, where many households use credit cards to cover rising costs for essentials like groceries and gas while higher-income households remain financially stable.

Late-stage delinquencies rose as well. The share of balances more than 90 days past due climbed to 12.8 percent, up from 7.6 percent. Researchers from the New York Fed said the increase is partly a lagging indicator influenced by a shift in lender reporting practices, where charged-off debts remain on credit reports longer than in previous years.

Credit card debt is part of a broader $18.8 trillion in total U.S. household debt. Mortgages account for $13.12 trillion, auto loans hit a new record at $1.71 trillion, and student loans stand at $1.65 trillion.

Financial advisors recommend paying more than the minimum each month and targeting the highest-rate balances first to reduce total interest paid.