Credit card debt poised to smash another record high

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Americans are racking up more credit card debt as still-high inflation and steep interest rates continue to make the cost of everyday necessities more expensive. 

The New York Federal Reserve Bank's Quarterly Report on Household Debt and Credit, slated for release on Tuesday morning, is expected to show that credit card debt hit a new record during the three-month period from January to March, smashing a previous high of $1.13 trillion, according to Matt Schulz, chief credit analyst LendingTree.

«Credit card balances have never risen from the fourth quarter of one year to the first quarter of the following year. I think there's a good chance we'll see a first-of-its-kind increase in tomorrow's report, which would mark a new record for Americans' credit card balances,» Schulz said.

The expected spike marks a major reversal from 2020, when consumers were rapidly paying down their credit card bills as the result of stay-at-home mandates and an influx of stimulus money. 

AMERICANS EXPECT HIGH INFLATION TO STICK AROUND IN LATEST NY FED SURVEY

A sticker for Mastercard, Visa and Discover credit cards is displayed on a door in New York on Oct. 17, 2023. (Angus Mordant/Bloomberg via Getty Images / Getty Images)

Since then, credit card debt has exploded. From 2021 to the end of 2023, credit balances jumped 47% – the steepest three-year climb on record.

The ongoing inflation crisis is one reason that consumers are increasingly relying on credit cards to pay their bills.

«High inflation and high interest rates are significantly contributing to Americans' debt loads and making this debt harder to pay off,» Schulz said. 

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