Credit Card Debt Rises As Consumers Face Higher Costs Of Living

U.S. consumers are certainly pulling out their credit cards to pay for goods and services, federal data has shown.

The total outstanding credit card balance rose $11.3 billion to nearly $5.07 trillion in May, beating April’s jump by $4.8 billion, according to data released by the Federal Reserve on Monday.

The median forecast in a Bloomberg survey of economists called for an $8.9 billion increase for May, which has not been adjusted for inflation.

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Revolving credit, which includes credit cards, spiked $7 billion in May to almost $1.35 trillion, the Fed data revealed. May’s increase in credit card debt reversed a $900 million decline in borrowings during the month of April.

Americans are putting more purchases on their credit cards after spending their COVID-19 pandemic savings and facing higher costs of living, Bloomberg reported.

The report also showed that credit card interest rates rose to 22.76% in May, up from 22.63% during the first quarter. The report did not show interest rates for March and April.

Price Action: Credit card issuers gave mixed reactions to Monday’s Fed report. Visa Inc. V declined 1.46% to $266.40, while MasterCard Inc. MA fell 0.72% to $446.24.

JP MorganChase & Co. JPM gained 0.22% on Monday to close at $205.17 as American Express Company AXP slipped 0.47% to $234.51 and Citigroup Inc. C picked up 1.09% to $64.74. Capital One Financial Corporation COF slid 0.14% to $135.81.

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