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Americans Have Now Charged Their Way To More Than $1 Trillion Card Debt

 NEW YORK–Americans now collectively owe more than $1 trillion on credit cards.

According to a new report on household debt from the Federal Reserve Bank of New York, total credit card debt rose nearly 5%, or about $45 billion, in the second quarter to a new high of $1.03 trillion.

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Although delinquency rates are still low by historical standards, rising balances may present challenges for some borrowers going forward, particularly when student loan payments resume this fall, according to the New York Fed.

A ’Huge Test’

"The resumption of student loan payments will be a huge test for many cardholders, shrinking the amount they have to devote to paying off card debt and leaving some people simply unable to make minimum payments at all," Matt Schulz, LendingTree's chief credit analyst, told CNBC. "One trillion dollars in credit card debt is staggering. Unfortunately, it is likely only going to keep growing from here."

CNBC noted that after a sharp slowdown in 2020, credit card balances have grown year over year for the past seven quarters, largely due to strong consumer spending in the face of higher prices, the New York Fed researchers found.

‘Brisk Growth’

"Credit card balances saw brisk growth in the second quarter," Joelle Scally, regional economic principal in the New York Fed's research and statistics group, said in a statement. "And while delinquency rates have edged up, they appear to have normalized to pre-pandemic levels."

The average credit card rate is also more than 20% on average, another all-time high.

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