- Americans owe a record $1.25 trillion on credit cards, up 5.9% from a year ago.
- 13.12% of credit card balances are at least 90 days delinquent, the highest since the 2008 financial crisis.
- Average credit card interest rates have reached 21%, up from 14.6% in February 2022.
- Nonprofit credit counseling agencies report a 24% increase in clients seeking help.
- More than half of consumers carry balances to cover essential expenses like groceries and utilities.
American households now carry a record $1.25 trillion in credit card debt, with delinquency rates climbing to their highest level in 15 years, according to Federal Reserve Bank of New York data released in May 2026.
The total represents a 5.9% increase from $1.18 trillion during the same period in 2025. More troubling, 13.12% of credit card balances are at least 90 days overdue—the worst reading since the aftermath of the 2008 financial crisis. The data, covering the first quarter of 2026, shows that soaring interest rates, persistent inflation and shrinking household savings have pushed millions of borrowers into financial strain.
The cost of carrying debt
The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures index, rose to 3.8% in April, maintaining pressure on family budgets even as broader economic indicators show stabilization.
Average credit card interest rates climbed to 21% in February, compared with 14.6% in February 2022, according to Federal Reserve data. For cards accruing interest, the average APR reached 21.52% in the first quarter. New credit card offers carry an average APR of 23.79%, with secured credit cards—often used by borrowers with poor credit—averaging 26.13%.
This combination of high rates and rising balances means the cost of carrying debt has become a significant burden for households already struggling to cover basic needs.
The shift to survival debt
Financial counselors report a fundamental shift in how Americans use credit cards. Rather than financing discretionary purchases, more households are using plastic to cover essential expenses.
More than half of consumers—53%—carry credit card balances to cover necessities such as groceries, utilities and housing, according to a May 2026 report from debt management company Achieve. Among respondents in the company’s survey of 2,000 consumers, 57% said it would take six months or longer to pay off all their credit card debt.
“When food, housing and healthcare is all more expensive, there is less money to pay off your credit card,” said Breno Braga, an economist at the Urban Institute. Braga noted that households under pressure prioritize essential bills before unsecured credit debt. His research found that 5.6% of credit card holders were at least 60 days behind on payments last year, surpassing pre-pandemic levels.
The National Foundation for Credit Counseling reported a 24% increase in clients in January compared with the same month a year earlier. Average monthly client volume is now 60% higher than in 2018. Middle-class households in particular are struggling, according to the organization.
“Middle-class households in particular are struggling to pay down balances as more families shift to a pattern of survival debt,” said Bruce McClary, spokesman for the organization.
A K-shaped recovery
The New York Fed’s research reveals a “K-shaped” pattern in credit card debt, where high-income households maintain their spending while lower-income families face increased financial strain. This divergence is likely to persist, according to Christian Floro, market strategist at Principal Asset Management.
“A subset of consumers, primarily subprime borrowers, has driven most of the increase in delinquencies, while prime borrowers have experienced only a marginal deterioration in credit performance,” Floro said. However, “the latest gasoline price shock could push delinquencies higher.”
A separate New York Fed report found that while high-income households maintained spending levels in March, low-income families were forced to cut back on gas consumption while still feeling increased financial strain.
Gasoline prices averaged $4.50 per gallon nationally in May, up from $3.14 a year earlier, according to AAA.
The broader picture
Credit card debt has risen by $482 billion since the first quarter of 2021, when pandemic-related restrictions and stimulus payments pushed balances to a low of $770 billion. That represents a 63% increase over five years. Current debt levels are $325 billion higher than the pre-pandemic record of $927 billion set in the fourth quarter of 2019.
Nationally, the average credit card debt among borrowers carrying balances was $7,886 in the third quarter of 2025, according to LendingTree. Eleven states have average balances of at least $9,000, led by Connecticut at $9,778, New Jersey at $9,748 and Maryland at $9,630. Southern states have the lowest average balances, with Mississippi at $4,887, Arkansas at $5,259 and West Virginia at $5,336.
The road ahead
Credit card debt historically declines in the first quarter after holiday spending, then rises through the rest of the year. The modest $25 billion decline in balances from the fourth quarter of 2025 to the first quarter of 2026 followed that pattern, but economists expect balances to resume their upward trajectory.
Household debt overall rose modestly in the first quarter, with increases in mortgage debt, auto loans and home equity lines of credit offsetting the seasonal decline in credit card balances.
The data suggests that for many American households, the rising debt burden represents a permanent shift from credit cards as a tool for convenience to credit cards as a financial backstop for basic needs. With interest rates expected to remain high and inflation continuing to strain budgets, credit counseling organizations anticipate further increases in the number of households seeking help—and further increases in the number falling behind.
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