Credit card balances continued increasing in mid-2026, reaching levels close to last year’s record high, according to a new household debt report from the Federal Reserve Bank of New York.
Credit card balances increased by $21 billion during the second quarter, bringing total outstanding balances to $1.26 trillion. The figure represents a 1.7% increase from the previous quarter and remains close to the record high of $1.28 trillion reached last year.
The share of credit card balances considered in late-stage delinquency, meaning payments are more than 90 days overdue, increased to 12.8% from 7.6% in the second quarter. The rise has raised concerns that more Americans are struggling to keep up with debt payments.
However, Federal Reserve researchers noted that late-stage delinquency is a lagging indicator because it reflects older charged-off debt that remains on credit reports. New credit card delinquencies have remained relatively stable, although they continue to be elevated compared with historical levels.
Households rely more on credit to manage costs
According to the New York Fed, approximately 6.97% of credit card balances transitioned into delinquency over the past year. Researchers said the trend reflects the challenges faced by many households, particularly those living paycheck to paycheck.
About 175 million Americans currently hold credit cards. While some consumers pay their balances in full each month, around 60% carry revolving debt, leaving them more exposed to rising interest costs and financial pressure.
Matt Schulz, chief credit analyst at LendingTree, said the increase in credit card debt, home equity lines of credit and other borrowing reflects consumers searching for ways to manage household budgets amid persistent inflation.
Other reports have also shown that home equity lines of credit (HELOCs) and home equity loans have represented a larger share of borrowing activity this year as consumers look for additional sources of funds.
Consumers struggle with long-term debt repayment
A separate survey from debt management company Achieve found that 55% of consumers carry credit card balances to cover essential expenses.
Brad Stroh, co-founder and co-CEO of Achieve, said short-term borrowing often begins as a temporary solution to household budget shortages but can become a longer-term financial burden as high living costs and interest charges accumulate.
Among respondents in Achieve’s June survey of 2,000 consumers, 56% said it would take six months or longer to fully repay their credit card debt.
