Credit card balances are rising to near record highs, according to the Federal Reserve Bank of New York’s new quarterly report on household debt and credit.
The report shows total household debt decreased by $13 billion in the second quarter of 2026, to $18.8 trillion. However, credit card balances rose by $21 billion to stand at $1.26 trillion — a 1.7% increase from the previous quarter and nearing last year’s high of $1.28 trillion.
“Delinquency rates across most products remained fairly stable,” the New York Fed researchers wrote in a blog post. However, the percentage of credit card balances in “late-stage delinquency,” or more than 90 days past due, rose from 7.6% to 12.8% between the third quarter of 2022 and the first quarter of 2026.
“Delinquency rates across most products have held steady over the past two years,” said Joelle Scally, economic policy advisor at the New York Fed, in a statement. “Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we’ll continue to monitor.”
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Why are credit card balances on the rise?
Rising prices, including for groceries and gas, and high interest rates are putting more pressure on household budgets, economists say.
The Consumer Price Index (CPI) rose 3.4% for the 12 months ending July, slightly down from June’s 3.5% annual increase. The energy index increased 14.7% for the 12 months ending July, and the food index increased 3% over the past year.
As a result, many consumers are turning to their credit cards to cover everyday expenses, as one survey shows.
More than half of American consumers carry credit card balances to cover the rising cost of essential expenses, with 25% carrying these debts for six months or longer, according to a recent survey by Achieve, a digital personal finance platform.
At the same time, credit card interest rates have been steadily climbing, with rates increasing from an average of about 15% in 2021 to nearly 21% today.
The combination of higher rates and tighter budgets is leading to a dangerous debt spiral, according to Fed researchers, prompting concerns that “Americans are falling behind on their debt payments at rates not seen since the Great Recession.”
What you can do if you’re struggling to make credit card payments
If you’re struggling to cover your minimum credit card payments, you’re not alone. According to data from Bank of America, nearly a quarter of all households were living paycheck to paycheck last year.
Add growing credit card payments to an already tight budget, and you could find yourself choosing between covering your living expenses and making your monthly credit card payment.
However, there are steps you can take to be proactive about your debt and alleviate the financial burden.
Read more: How to pay down debt using a balance transfer credit card
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Contact your credit card company: See if they may be willing to work with you to lower your monthly payment or put your payments on pause for a period of time, especially if there are any financial hardships that are preventing you from making your payments.
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Look for ways to earn extra income: If you have the ability to take on a side gig, extra shifts at your current job, or you can make the case for a promotion or salary increase, these may be the fastest ways to make repayment more manageable. Of course, boosting your income means that you have to be wary of lifestyle creep and tricking yourself into a false sense of security because you have a bigger paycheck coming in. Even with a higher income, you should look for ways to reduce your discretionary expenses so you can put more money toward your debt.
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Consider debt consolidation or credit counseling: If your credit debt is becoming too difficult to manage on your own, there are qualified credit counselors from organizations such as the National Foundation for Credit Counseling or the Financial Counseling Association of America who can help you create a debt management plan that’s right for you.
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