Credit Card Debt in the U.S. — $1.28 Trillion and Rising

The Federal Reserve Bank of New York issued a report last week on credit card debt in the U.S. At the end of the 4th quarter of last year we had charged our cards up to $1.28 trillion. That’s a 5.5% increase over the 4th quarter of 2024.

That said, a rise in spending always goes up in the 4th quarter because of holiday spending.

Researchers at the Fed said with the rise in credit card debt is a big increase in credit delinquencies in home and auto loans. Also hurting consumers is the high interest rates charged for credit cards. The average nationwide is about 20%. So using a credit card to borrow money is the most expensive way to go.

As of the end of the 4th quarter of 2025, over 175 million of us were using credit cards. Some do their best to pay off the bill at the end of each month but the Fed says 60% of credit card users carry an unpaid balance from month-to-month.

The Fed also notes that 55% of credit card holders use their cards to pay for every day living and essential expenses.

President Trump wants a temporary cap on credit card interest at 10%. It’s a popular idea with consumers but banking industry representatives say they’ll fight any effort at price controls.

An International Monetary Fund (IMF) study says U.S. household debt accounts for 69.4% of the Gross Domestic Product (GDP). The IMF counts household debt as loans and debt securities.

“In the event of economic shocks, high household debt levels result in non‑performing loans that weaken bank balance sheets and spread to other financial institutions through the contagion effect,” the study noted. “This could result in an unstable financial sector that restricts lending to profitable investments and deserving households. Ultimately, household consumption and investment decrease, thereby lowering economic growth.”

Switzerland has the highest household debt in the world at 125.4% of the GDP. Here are some other statistics:

2. Australia — 112.2%

3. Canada — 100.1%

4. Netherlands — 93.6%

5. New Zealand — 90.3%

Source link: CNBC — https://bit.ly/4aUvodQ