Credit Card Debt Hits New High as Consumers Lean on Plastic to Offset Inflation
• Revolving debt, mainly credit cards, rose to a new record high of $1.3 trillion in October as consumers rely more on cards to support spending amid high inflation.
• Credit card debt has grown much faster over the past 2 years compared to pre-pandemic, suggesting consumers have less choice but to use cards to pay growing expenses.
• More consumers, especially those under 40, are falling behind on card payments as financial pressures mount with high interest rates and inflation.
• Rising delinquencies are concerning but a credit crunch is not imminent yet as consumers still have job security and are getting pay raises.
• If households continue to lever up credit card debt instead of reducing reliance, it may extend economic expansion but increase vulnerabilities.