Record High Credit Card Debt: 55% of Americans Concerned About Repayment as Inflation Pushes Consumers to Credit Reliance

According to a Newsweek poll conducted by Redfield & Wilton Strategies, 55% of Americans are “very” or “fairly” concerned about paying off credit debt this year. The total credit card balance of Americans is at its highest point since the U.S. Federal Reserve began tracking the data, and current metrics indicate that Americans are using credit to mitigate inflationary pressures.

U.S. Consumers Rely on Credit Cards to ‘Navigate Costs Associated With Inflation’

While the most recent consumer price index (CPI) report from the U.S. Bureau of Labor Statistics indicates a cooling of inflation in the United States, Americans have turned to credit cards to offset the rising prices. According to a poll published by Newsweek and Redfield & Wilton Strategies, which surveyed 1,500 American citizens on May 31, approximately 30% of respondents have debt ranging from $1,000 to $5,000. Among Americans aged 22-34, around 22% have accumulated over $10,000 in debt, while 21% of U.S. citizens aged 35-44 also carry the same level of debt.

Melissa Lambarena, a credit cards expert at Nerdwallet, stated to Newsweek that U.S. “consumers have been actively using their credit cards to navigate costs associated with inflation.” The Nerdwallet executive noted that increasing prices have caused some Americans to depend on their credit cards to meet their financial needs. According to statistics from Lendingtree, credit card debt has reached a record high for American consumers, citing consumer debt data from the Federal Reserve Bank of New York.

“Americans’ total credit card balance is $986 billion in the first quarter of 2023, according to the latest consumer debt data from the Federal Reserve Bank of New York,” a Lendingtree report details. “That’s unchanged from the fourth quarter of 2022’s record number, leaving the balance the highest since the New York Fed began tracking in 1999.”

American Credit Card Debt Has Risen Significantly Since Q3 2020, Credit Debt Has Surged on a Global Scale

The all-time high represents a 17% increase compared to the year prior, indicating that millions of Americans are relying on credit more than ever before to cover their expenses. Credit card debt had been steadily rising until the pandemic hit, and in 2020, it significantly declined as Americans reduced their usage of these financial tools. According to Newsweek’s survey, 55% of U.S. residents express significant or moderate concerns about their ability to repay credit card debt this year. The statistics also reveal that this trend is particularly pronounced among younger age groups, specifically those aged 18-24.

Moreover, Americans are not the only ones relying on credit card charges to make ends meet, as multiple sources indicate a global surge in credit card debt. Data reveals that the United States currently holds the highest amount of credit card debt, followed by Canada, the United Kingdom, and Japan. Conversely, Italy, Brazil, and India have comparatively lower average credit card debt. According to the Newsweek poll, certain experts suggest the necessity of “debt forgiveness” or propose that American consumers could potentially “benefit from payment holidays.’”