They’re not just racking up higher balances on their credit cards as sky-high inflation and rising interest rates hit household wallets, though. A study released Tuesday by the Federal Reserve Bank of New York’s Center for Microeconomic Data shows a 13% cumulative year-over-year increase in credit card balances. That’s the largest jump in 20 years, since 2002.
Credit card debt stands at $890 billion as of the end of the second quarter, according to the quarterly report on household debt and credit. While credit card balances typically rise during the second quarter, the $46 billion increase makes the second quarter one of the highest jumps on record since 1999. The last time total credit card balances were this high was the first quarter of 2020.
“Americans are borrowing more, but a big part of the increased borrowing is attributable to higher prices,” New York Fed researchers wrote Tuesday. Not only did balances increase, researchers note, but the number of new credit cards was up too.
Mortgages, auto loans, retail cards, and other consumer loans also rose at a fairly rapid clip. In total, non-housing debt grew by $103 billion during the second quarter, the largest increase recorded by the New York Fed since 2016.
Overall, Americans’ total household debt increased by 2% to $16.15 trillion during the second quarter, according to the New York Fed. That puts balances about $2 trillion higher than they were at the end of 2019, prior to the onset of the pandemic.