According to the latest quarterly report from the Federal Reserve Bank of New York, credit card balances have increased by $21 billion in the second quarter of 2026, totaling $1.26 trillion, which is approaching last year's peak of $1.28 trillion. This marks a 1.7% rise from the previous quarter.
Notably, the percentage of credit card balances in late-stage delinquency, defined as being over 90 days past due, surged to 12.8% from 7.6%, indicating that more Americans are struggling to keep up with their debt payments, a trend reminiscent of the Great Recession.
However, the New York Fed researchers noted that this delinquency rate is a lagging indicator, reflecting past debts rather than current trends. New delinquencies have remained steady but are still considered elevated, with 6.97% of balances transitioning to delinquency over the past year. The researchers highlighted a 'K-shaped economy,' where many households are living paycheck to paycheck.
Approximately 175 million Americans hold credit cards, with around 60% carrying revolving debt, which increases their financial risk. Matt Schulz, chief credit analyst at LendingTree, pointed out that the rise in credit card and home equity debt suggests that consumers are seeking ways to manage their budgets amid persistent inflation.
A separate report from Achieve revealed that 55% of consumers use credit cards to cover essential expenses, and many borrowers anticipate it will take six months or longer to pay off their debts, indicating a growing strain on household finances