Americans Owe A Record $1.21 Trillion In Credit Card Debt — Expert Warns 'There's No End In Sight'

By the end of 2024, Americans’ credit card debt reached an all-time high of $1.21 trillion—up $45 billion from the previous quarter and 7.3% higher than in 2023. A major factor in this increase was holiday spending, with consumers spending $702 billion, according to the Federal Reserve Bank of St. Louis. 

Rising Debt, Delinquency, and Lenders’ Challenges

Meanwhile, more people are falling behind on payments. According to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, in the third quarter of 2024, approximately 10.93% of credit card accounts in the United States were more than 90 days delinquent. 

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This marked the highest rate since the first quarter of 2012. Simply put, a lot of people are struggling to keep up.

Experts cite inflation and increasing reliance on credit cards as main culprits of rising debt. LendingTree TREE Chief Credit Analyst Matt Schulz commented, "Stubborn inflation has shrunk a lot of Americans' financial margin for error from slim to about none, forcing people to lean more heavily on credit card debt."

And it’s more expensive to carry a balance. The average credit card interest rate has inched over 20%, says LendingTree. That’s especially painful for lower-income families, as inflation and steep interest charges make it even more difficult to get ahead.

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This credit card debt boom is not happening in a vacuum, however. The New York Fed reports that total household debt—comprising mortgages, auto loans, and student loans—totaled $18.04 trillion at the end of 2024. 

Despite these economic limitations, consumer spending is sound. However, with high debt loads and still-high rates of interest, financial security remains a mounting concern. “There’s very little reason to believe that we won’t continue to see new credit card debt records being set going forward," Schulz said.

All the states are not hurting to the same degree. Based on Visual Capitalist, most expensive states like Alaska and Washington, D.C., carry the highest average credit card debt—over $7,000 per household—while Mississippi and West Virginia have averages of around $5,300. Nonetheless, high-income states may not struggle as much to pay off debt even with higher debt levels.

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With increasing credit card debt, consumers are seeking other avenues for funding. Buy now, pay later plans are especially popular during the holiday season. 

Adobe Analytics reported that during January through April 2024, BNPL accounted for $25.9 billion in e-commerce sales, an 11.8% increase compared to the same months of 2023. Adobe predicted that BNPL would account for between $81 billion and $84.8 billion in online spending for all of 2024, an 8% to 13% year-over-year growth. While helpful, consumer advocates caution overindulgence and increased charges can accompany BNPL if not closely watched, according to the Associated Press. 

Higher delinquency and debt levels are also placing a squeeze on lenders. The Financial Times, citing BankRegData, reported that lenders charged off over $46 billion in seriously delinquent credit card debt in the first three quarters of 2024—a 50% increase over 2023 and the highest amount since 2010.

This underscores the economic pressure on low-income consumers, whose savings rate has fallen to zero.

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