US household debt hits new record

Data from the New York Federal Reserve shows that total credit card debt in the US increased by $45 billion in the second quarter of 2023, up more than 4% compared to the same period last year.

In the second quarter of 2023, household debt increased by another $16 billion, reaching $17 trillion, also a new record. (Photo: Reuters).

The increase brings the total amount of credit card debt to $1.03 trillion, reflecting strong consumer spending by Americans as well as higher prices due to inflation.

Notably, also in the second quarter of 2023, household debt increased by $16 billion, to $17 trillion, also a new record. Meanwhile, credit card delinquencies also reached an 11-year high.

The Federal Reserve’s measure of credit card debt that is 30 days or more delinquent rose to 7.2% in the second quarter of 2023 from 6.5% in the first quarter of 2023, officials said, the highest rate since the first quarter of 2012.

Commenting on the above figures, Ms. Elizabeth Renter, data analyst at personal finance website NerdWallet, said that overdue credit card payments tend to increase.

"This is a sign that consumers are being hit by rising prices while their savings have fallen significantly compared to a few years ago. As credit card usage has increased, so have delinquency rates," she said.

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