Credit card debt reaches $1.21 trillion — in line with last year’s all-time high, NY Fed finds

Credit card balances are ticking higher in 2025, according to a new quarterly report on household debt from the Federal Reserve Bank of New York.

Balances rose by $27 billion in the second quarter to a collective $1.21 trillion — in line with last year’s all-time high. The total is up 2.3% from the previous quarter.

At the same time, “we are still seeing elevated delinquency rates for credit cards,” the New York Fed researchers found, with 6.93% of balances transitioning to delinquency over the last year.

“This looks to be a little bit of catch up,” the researchers said on a press call Tuesday, in part due to “unusual leniency during the pandemic” and because consumers “may have overextended themselves” as inflation spurred higher costs in the years since.

“Those are things we have been keeping an eye on,” the New York Fed researchers said.

Credit card debt had remained stable for decades. However, in the years since the pandemic, households largely spent down their excess savings while the cost of living jumped, which sparked a sharp rebound in credit card balances.

‘A growing K-shaped split’

Separate data from Equifax found that many consumers continue to spend, despite elevated prices and high borrowing costs, while credit card delinquency rates remain relatively flat.

But subprime borrowers show signs of strain, with a rising share of the overall debt, according to Equifax. Subprime generally refers to those with a credit score of 600 or below.

“There’s a growing K-shaped split in the consumer landscape, with subprime borrowers falling behind,” Tom O’Neill, market pulse advisor at Equifax, said in a statement.

Many subprime borrowers are younger cardholders with shorter credit histories. These are also the borrowers more at risk of facing debt repayment challenges now that the Trump administration has restarted collection efforts on defaulted federal student loans.