Credit card debt climbs to $1.26 trillion as ‘K-shaped’ divide persists, New York Fed research finds — SkimNews
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- Credit card balances rose $21 billion in Q2 2026 to $1.26 trillion, nearing the all-time high of $1.28 trillion set last year, per the New York Fed's quarterly household debt report
- Late-stage credit card delinquencies (90+ days past due) surged to 12.8% from 7.6% — the highest level since the Great Recession, though NY Fed researchers noted this is a "lagging indicator" reflecting past charge-offs lingering on credit reports
- New credit card delinquencies held steady at 6.97% of balances transitioning to delinquency over the past year but "remain at elevated levels," the NY Fed said
- NY Fed researchers described the pattern as a "K-shaped economy" where "a lot of households live paycheck to paycheck"
- LendingTree's Matt Schulz said the simultaneous rise in credit card debt, HELOC debt, and personal loans shows consumers are "extending their budget in the face of stubborn inflation"
- An Achieve survey of 2,000 consumers found 55% carry credit card balances to cover essential expenses, and 56% said it would take six months or longer to pay off all their credit card debt
Why it matters: With 60% of 175 million U.S. cardholders carrying revolving debt and 55% using cards for essentials, the delinquency jump from 7.6% to 12.8% signals deepening strain on lower- and middle-income households. Researchers caution it's a lagging indicator, but new delinquencies remain elevated and consumers increasingly turn to HELOCs and personal loans to stretch budgets amid persistent inflation.
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