Inflation and rapidly growing interest rates pushed total household debt up to a record $16.2 trillion last quarter as credit card spending posted the biggest yearly spike in more than 20 years, the New York Federal Reserve reported on Tuesday. They also warned that delinquencies are beginning to rise amid growing concerns over the weakening economy.
The report shows total household debt increasing in the second quarter of 2022 by $312 billion (two percent), to $16.15 trillion. Balances now stand $2 trillion higher than at the end of 2019, before the Covid-19 pandemic. Mortgage balances — the largest component of household debt — climbed $207 billion and stood at $11.39 trillion as of June 30. Credit card balances saw their largest year-over-year percentage increase in more than twenty years, while aggregate limits on cards marked their largest increase in over ten years. Transitions into delinquency ticked up but remained very low compared to historical levels. The report is based on data from the New York Fed’s nationally representative Consumer Credit Panel.