Americans' household debt surged in recent years amid challenging consumer environment

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Former Chair of the Council of Economic Advisers Kevin Hassett reacts to former President Trump outlining his economic agenda in North Carolina on Kudlow.

The indebtedness of American households has surged in the last few years amid a challenging economic environment for consumers that has contributed to delinquency rates rising to their highest levels in more than a decade.

A quarterly report published this month by the Federal Reserve Bank of New York on household credit and debt found that between the first quarter of 2021 and the second quarter of 2024, credit card debt surged 48.1% while household debt – which includes mortgages and auto loans – rose by 21.6%.

In dollar terms, credit card debt rose from $770 billion in early 2021 to $1.14 trillion in the most recent quarter, while household debt increased from $14.64 trillion to $17.8 trillion in the same period.

Amid American households' rising debt burdens, delinquency rates have grown as well. In the last 12 months, about 9.1% of credit card debt balances and 8% of auto loan balances moved into delinquency – the highest levels since early 2011 and the end of 2010, respectively. The early delinquency rate for mortgages edged up by 0.1 percentage point, though the New York Fed noted that remains low by historical standards.

CREDIT CARD DELINQUENCY RATES HIT WORST LEVEL SINCE 2012 IN NEW FED STUDY

Credit card delinquencies reached 9.1%, the highest level since 2011 per the New York Fed. (Photo Illustration by Justin Sullivan/Getty Images / Getty Images)

American households' ballooning debt burden occurs against the backdrop of the inflation rate hitting a 40-year high of 9.1% in June 2022. That spurred the Federal Reserve to embark on a campaign of interest rate