7 ms·
Credit card debt rises to $1.26T, nearing all-time record
- 2OEH8eoCRo0 1mo agoThe American consumer is an enigma
- clickety_clack 1mo agoWho is buying things with near-30% APR loan?
- toomuchtodo 1mo agoPeople who cannot afford to survive without this credit and need it to fill the wage expense gap for basic living needs. This is why the unemployment rate is a poor metric. It doesn’t matter much if you have a job if its wages are insufficient for one to meet their basic needs on. Lots of employed folks, but folks barely treading water economically. A silver lining is that with immigration constrained for the foreseeable future, wages will be pushed up over time through structural demographics further tightening labor supply. https://www.marketplace.org/story/2026/08/11/credit-card-delinquencies-approach-great-recession-levels https://www.marketplace.org/story/2026/08/11/credit-card-del... https://www.marketplace.org/episode/2026/07/16/workers-are-barely-getting-ahead-in-this-economy https://www.marketplace.org/episode/2026/07/16/workers-are-b... https://news.ycombinator.com/item?id=49294240 https://news.ycombinator.com/item?id=49294240 (citations) https://news.ycombinator.com/item?id=49027462 https://news.ycombinator.com/item?id=49027462 (citations) https://news.ycombinator.com/item?id=47680794 https://news.ycombinator.com/item?id=47680794 (citations) TLDR Wages must go up, price levels will not come down.
- toomuchtodo 1mo agoAdditional citation: https://www.marketplace.org/episode/2026/08/07/job-losses-reveal-a-shakier-labor-market https://www.marketplace.org/episode/2026/08/07/job-losses-re...
- mapotofu 1mo agoWow look at Mr. “I’ve-never-been-poor”, bragging about his privilege. What a flex!
- margalabargala 1mo agoBad take. I've been down to single-digit dollars, in situations where I was forced to choose between food or gas. I also had "never ever have any credit card debt" drilled into me from a young age, and as a result didn't even have a credit card at the time to make sure the temptation to use it wasn't an option. I ate a lot of ramen, rice, or sometimes nothing, but eventually made it through. If I had racked up a bunch of debt I would have been poor much longer, though it might have been healthier for me.
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- clickety_clack 1mo agoYou have no idea who I am or what my history is.
- mapotofu 1mo agoAnd you have no idea about theirs.
- JKCalhoun 1mo agoI agree the person you are responding to was out of line. But your question, who is taking a credit line at 30%, you could answer for yourself if you had been in that situation before. For example, I might answer it with, "A college student who has books to purchase for a class but no funds."
- kevin_thibedeau 1mo agoThat's what a 0% balance transfer is for right? Just play musical cards until the issuers blacklist you.
- mv4 1mo agoIt's never 0% though. You pay a transfer fee (e.g. 5%). The 0% promo period is also limited. The consumer is screwed either way, whether they try to "transfer" balances or not.
- Grombobulous 1mo agoI actually have a no-rewards credit union credit card that has no balance transfer fees and the lowest APR I’ve ever seen on a credit card. It has bailed me out of paying high interest rates and fees during hard times before.
- rootusrootus 1mo agoI keep a card around like this. I use it once a year so they don't close it for inactivity, but it's a non-reward card so I don't use it day to day. It has a 8.50% APR from two decades ago, so I keep it around just in case. I can't really see where I'd actually need it, but it costs me nothing to keep it around.
- tialaramex 1mo agoThat very much depends. Many years ago this "0% transfer" stuff was relatively new in the UK and a new outfit wanted to break into the market, they had two ideas which I guess they had costed as marketing ploys. First, the cards were a weird shape, this means there are a few applications where your card doesn't work, which is slightly annoying, but it's balanced by the brand recognition. Nobody cares which brand of rectangular plastic card you... oh, that's a weird shape. But the Second was the easiest possible 0% transfer. To effect the transfer they write you a cheque for however much they'd agreed (let's say £1000) and you use that cheque to pay off a card or other line of credit. They charge 0% on this for 12 months. What I, and lots of poor but money-savvy people did was sign up for the card. Deposit the cheque in an interet-bearing savings account, and set an alarm to pay the card off before that 0% expired. So twelve months later you've made say £30 interest and you cut the card up. I don't know how many people did this, versus how many engaged with their product as they'd imagined. I know only two things: 1. I had about 50p outstanding balance to pay on my 12 month card, I figured they'd tell me I need to pay 50p within 30 days or whatever and if not they'd charge me extra - nope, they wrote saying "Your balance is negligible, we write off this tiny balance and don't expect to ever hear from you again". 2. This offer was never repeated. They did other 0% transfer offers but the "It's just a cheque" idea was never attempted again.
- bluefirebrand 1mo agoI use a credit card for purchases because if someone gets ahold of it and goes wild, it's insured and has a limit If they get ahold of my banking info they could take a lot more than my credit card limit. The damage they can do with my credit card is way, way less.
- Wowfunhappy 1mo ago...I'm not saying this is good, but doesn't the existence of inflation mean we'll always keep breaking this record?
- paimapi 1mo agoyes but you can graph trends over time: https://www.newyorkfed.org/microeconomics/hhdc https://www.newyorkfed.org/microeconomics/hhdc for example, the last time we saw a nice little rise was in 2008 where nothing bad happened and everything was okay (look at the 90+ day delinquency rates). at least housing and mortgages are fine for now but if there was ever an actual recession indicator, this may be it
- anonymars 1mo agoI think you're putting the cart before the horse: the rise looks to have been constant, punctuated by then leveling off and falling, of which we currently see only the barest hint
- paimapi 1mo agowe're looking at the 90+ day default line chart? 2008 saw an increase from sub 8% (which seems to be the norm) to 13%. 2023 was at 7% and we're right now sitting at 13% again. there are no other significant swings in credit card debt
- anonymars 1mo agoOkay, I see what you're saying. Since the web can't be bothered to make links work anymore, the link just takes you to the first chart (total debt) rather than the third one (delinquencies)
- ticulatedspline 1mo agoyep, and depending on what meaning you want to derive population matters too. also kinda like all kinds of movies have been breaking sales "Records" but if you look at the inflation adjusted top ten, #1 is still "Gone With the Wind".
- amazingamazing 1mo agoNot adjusted for inflation, so useless. At least do % of gdp which is also flawed but better than this.
- mathgeek 1mo agoSince wages have not kept up with inflation, it’s already factored in as inflation drives the total debt faster. Total debt rising without a corresponding rise in wages means an increase in interest and defaults in general.
- alphabettsy 1mo agoA total measured over the entire US economy without adjusting for a variety of factors including inflation and population change seems like exactly the kind of thing you would expect from a news headline. How about average or per capita?
- wilg 1mo agoThe median wage has kept up with inflation anywhere this line is flat or sloping up: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- happytoexplain 1mo agoDoes a balance that has not accrued interest count as debt for this measurement? I.e. people who always pay the statement.
- panarky 1mo agoThe $1.26 trillion Federal Reserve figure includes both balances paid in full every month and balances accruing interest. Convenience spending by "transactors" (roughly 35% of cardholders) who pay in full every month is something like $200 billion of this.
- fhdkweig 1mo agoDo you have a citation for the 35% number? I wouldn't have thought it was that rare.
- JKCalhoun 1mo agoI'm surprised it's that high. While times have changed, the whole idea of the credit card was to purchase a thing you could not otherwise afford to.
- panarky 1mo agoLet me Google that for you ... Ah, here it is https://bpi.com/missing-factors-in-the-cfpbs-analysis-of-rising-credit-card-interest-rates/#:~:text=As%20shown%20in%20Exhibit%204%2C%20the%20share,to%2013%20percent%20over%20the%20same%20period. https://bpi.com/missing-factors-in-the-cfpbs-analysis-of-ris...
- happytoexplain 1mo agoI'm shocked how small that part of the pie is. That's concerning.
- Fire-Dragon-DoL 1mo agoI don't get how people come up with the idea of paying interests on a credit card. The interests are extortion level, 20%? Wtf? A personal line of credit is like 8%
- panarky 1mo agoNow do total debt: government + corporate + household Then add unfunded liabilities like pension benefits and healthcare promises for every federal, state and local government, school district and corporation. A trillion of credit card debt is something like one half of one percent of total indebtedness.
- trhway 1mo ago>A trillion of credit card debt is something like one half of one percent of total indebtedness. exactly. it is just $4K/person. Whereis current US national debt is $120K/person.
- rchaud 1mo agoThe US doesn't default on his interest payments. The US consumer on the other hand....
- pocksuppet 1mo agoThe US has defaulted on its interest payments several times.
- JKCalhoun 1mo agoRegardless, this article is about one of those nearing record levels.
- pocksuppet 1mo agoBut beware the trap: total debt = total savings
- sscaryterry 1mo agoWhen China's makes the call on US debt, its going to be very bleak day.
- panarky 1mo agoIt would be bleak because the US won't pay, and that would crater both the US and China. That's why China will never do this. Better for both nations to extend and pretend.
- ecommerceguy 1mo agoAre you saying the bond market would go without a bid?
- panarky 1mo agoI'm saying bond prices would drop sharply if China tried to rapidly sell even 10% of its holdings. When bond prices drop, US interest rates go up, which hurts the real US economy. And when bond prices drop, that devalues the remaining 90% of China's holdings, hurting China too. The Fed could stabilize the bond market by printing dollars to buy the bonds itself, but that would devalue the dollar and drive up inflation in the US. When China tries to repatriate that wealth, they must sell dollars and buy yuan, which would drive up the value of the yuan, driving up the cost of Chinese exports, hurting their manufacturing sector. It's mutually assured destruction.
- teravor 1mo ago> It's mutually assured destruction. it doesn't sound like it from what you said. China appears to have the option to destroy the US economy by forfeiting much of the value of the US dollars they have, they don't have to buy yuan with it.
- panarky 1mo agoBoth economies would suffer massive shockwaves, but the US has central bank tools to absorb the blow, while China destroys its own asset base with no way to recover the loss. They're not going to burn down their own house just to smoke out their neighbor.
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- wilg 1mo agoBasic media numeracy will tell you that because the population is increasing and inflation exists this number is not meaningful. It sounds like it's describing "the problem with credit card debt is worse than ever" but this number cannot tell you that. Fortunately, the data does exist and has been analyzed and it's already been put together for you here: https://www.philadelphiafed.org/surveys-and-data/2026-q1-large-bank?utm_source=chatgpt.com https://www.philadelphiafed.org/surveys-and-data/2026-q1-lar... The good news from doing the analysis properly is that this situation has been improving recently. (You will find this a lot when people panic about statistics.)
- andrewinardeer 1mo agoWhat happens to the credit card debt that is owed by people who are hunted down by ICE and kicked out of the country? Is it free money for them?