US credit card debt climbs to $1.26tn, nearing last year’s record high

Credit card debt in the United States is growing close to a record high, having crept up from $54bn to $1.26tn between April and June compared with the same period last year, according to a report by the Federal Reserve Bank of New York.

That figure is just shy of last year’s record high of $1.28tn.

The report, published on Tuesday, also shows that credit card debt rose by $21bn, or 1.7%, in the second quarter compared with earlier this year, meaning Americans carried higher debt into the summer than in the first three months of 2026.

“Mortgage and student loan balances saw a small decline, while there were increases across other debt products,” reads a blogpost accompanying the Fed’s report.

An increase in credit card debt more than 90 days past due, from 7.6% in late 2022 to 12.8% early this year, raised concerns about household stress in “rates not seen since the Great Recession”. Researchers found the pace of new delinquencies had remained stable for roughly two years.

The overall share of household debt held by people who were behind on their payments fell slightly in the months between April and June to 4.7% of outstanding balances versus 4.8% in the prior quarter.

High inflation has made it harder for many households to maintain their standard of living, according to Lucia Dunn, a professor emerita of economics at Ohio State University.

“A lot of this is feeding your kids, going into stores, people buying their school supplies, the groceries, the baby formula, the diapers,” said Dunn. “I’m sure a lot of those people have to carry a balance because they are just simply strapped economically.”

The Consumer Price Index report launched on Wednesday showed that prices rose 0.1% in July from a month earlier, with prices remaining at higher levels than those seen before the war with Iran.

Dunn said that using a credit card and paying off the balance every month and carrying a balance from month to month carry different risks. Carrying a balance can become a problem, although it can also be useful in certain circumstances, such as when someone loses a job or needs to cover an unexpected expense.

“A lot of it does have to do with the economy,” she said. “We’re sort of in hard times.

“Having debt when there’s a downturn is very serious for people, and it can do a lot of harm,” Dunn added, pointing to the 2008 financial crisis as an example.

The Fed’s report also revealed that US consumers took out a record amount in auto loans between April and June, reaching $211bn in nominal terms.

Reporting from The Guardian contributed to this story.