(TargetLiberty.org) – A growing number of Americans have been using their credit cards in order to cover their daily costs. At the end of September, the record reached a new high according to a report from the New York Federal Reserve that was published on Tuesday.
From July to September the credit card debt expanded by $48 billion, resulting in it surging above $1.08 trillion for the first time. This means that in the last quarter, there was a 4.6 percent increase from the previous quarter. This is also the highest level on record since 2003 and the eighth consecutive annual increase.
New York Fed economist Donghoon Lee stated that in the third quarter, there was a large increase in the credit card debt balance. He further pointed out that this growth was consistent with the real GDP growth and consumer spending.
The report showed that there was an overall increase in the number of borrowers who were struggling to cover their credit card payments and other loans. As a result, as of September, there was also a 3 percent increase in the outstanding debt that was delinquent. This is an increase from the 2.7 percent in the previous quarter.
Despite the increase the current levels still remain below the pre-pandemic average at 4.7 percent. However, while the level of delinquencies remains lower than the pre-pandemic average, the number of new delinquent individuals is higher than the one from before the pandemic.
New York Fed researchers have argued that there were many reasons for the increase which could be driven by the loosening of tightening standards in the last few years.
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