Credit Card Debt Tops $1.28 Trillion

U.S. credit card balances have hit a record high of about $1.28 trillion, and it’s a clear sign that many households are under growing financial strain.

What the $1.28T number means

• The $1.28 trillion figure comes from the New York Fed’s latest Quarterly Report on Household Debt and Credit, covering the fourth quarter of 2025.

• Balances rose about $44 billion in just that quarter, up roughly 5.5% from a year earlier, marking the highest level of credit card debt on record.

Why balances are so high

• Persistent inflation and higher living costs have pushed more people to use cards for everyday expenses, not just emergencies or big purchases.

• Studies cited alongside the Fed data show more than half of cardholders who carry a balance do so mainly to cover essentials like groceries, utilities, and housing-related costs.

The cost of this debt

• Average credit card interest rates are around 20% nationally, with many cards charging well above that, making it one of the most expensive forms of borrowing.

• Roughly 60% of U.S. cardholders revolve a balance month to month, so high rates significantly increase how long it takes them to pay off what they owe.

Signs of growing stress

• The New York Fed and related analyses report that delinquencies on credit cards and other consumer loans have been rising, particularly among lower‑income and more financially vulnerable households.

• Researchers describe the situation as a “K‑shaped” economy: higher‑income households are generally managing, while lower‑income households are falling behind on payments more often.

Policy and what you can do

• President Donald Trump has floated the idea of a temporary 10% cap on credit card interest rates, but banks and industry groups are expected to fight such limits.​

• On an individual level, experts commonly recommend focusing on paying more than the minimum on the highest‑rate card first, looking at 0% balance transfer offers if you qualify, and avoiding putting recurring essentials on cards unless you have a clear payoff plan.

If you tell me your approximate balance, interest rate, and monthly budget, I can sketch a quick payoff path and how much interest you’d likely save by changing your strategy.