US Credit Card Debt Hits Record $1.26tn as More Americans Struggle to Keep Up

U.S. households are taking on more credit card debt as persistent living costs put increasing pressure on family budgets, with total balances approaching a record high and a growing share of debt moving into serious delinquency.

Credit card balances increased by $21 billion in the second quarter of 2026 to $1.26 trillion, up 1.7% from the previous quarter, according to a quarterly household debt report released Tuesday by the Federal Reserve Bank of New York. The balance is approaching last year’s record of $1.28 trillion.

The deterioration in credit quality is drawing particular attention. The share of credit card balances classified as being in “late-stage delinquency,” meaning payments are more than 90 days overdue, rose to 12.8% in the second quarter from 7.6% a year earlier, according to the New York Fed.

The researchers said the increase has raised concerns about household debt stress reaching levels reminiscent of the period around the Great Recession. They cautioned, however, that the measure is a lagging indicator because it includes older debts that have already been charged off but continue to appear on consumers’ credit reports.

More recent delinquency data provide a less severe picture. New credit card delinquencies have remained broadly steady, although they are still elevated. About 6.97% of credit card balances transitioned into delinquency over the past year, according to the New York Fed.

“To us it reflects this K-shaped economy,” New York Fed researchers said during a press call Tuesday, pointing to the widening financial divide between households with greater financial resilience and those struggling to meet everyday expenses.

“There are a lot of households that live paycheck to paycheck.”

The scale of credit card borrowing underscores the vulnerability. About 175 million Americans have credit cards, and roughly 60% carry revolving balances rather than paying their bills in full each month, according to the New York Fed.

The rise in revolving debt is occurring alongside greater use of other forms of borrowing. Matt Schulz, chief credit analyst at LendingTree, said the increase in credit card debt, home equity lines of credit and other consumer loans indicates that households are increasingly using debt to stretch their budgets.

“The rise in credit card debt, HELOC debt and other debts, which include personal loans, clearly show that people are looking for ways to extend their budget in the face of stubborn inflation,” Schulz said.

Home equity lines of credit, or HELOCs, and home equity loans have also represented a larger share of household borrowing this year, adding another layer to the changing composition of consumer debt.

Separate research from debt-management company Achieve suggests that borrowing is increasingly being used for basic household needs rather than discretionary purchases. More than half, or 55%, of consumers surveyed said they carry credit card balances to pay for essential expenses.

That pattern raises concerns about the sustainability of the borrowing. Brad Stroh, Achieve’s co-founder and co-CEO, said short-term debt can initially serve as a temporary solution when household income falls short of expenses, but rising living costs and interest charges can turn that temporary financing into longer-term financial strain.

Among 2,000 consumers surveyed by Achieve in June, 56% of borrowers said they expected it would take at least six months to pay off all their credit card debt.

The data point to a consumer economy increasingly divided along financial lines. Aggregate credit card balances have not yet returned to their previous record, and the relatively stable flow of new delinquencies suggests that a broad-based deterioration in repayment behavior has not occurred. But the sharp increase in late-stage delinquency, combined with continued reliance on revolving credit for essential expenses, signals that a significant segment of U.S. households has little room to absorb higher costs.