US credit card debt hits $1.26 trillion as delinquencies rise: What you can do
In this photo illustration, a close view of a Visa Signature debit card and a credit card. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
Credit card debt inched up slightly in the second quarter of this year, while delinquent credit card payments shot up more than 5%.
The latest figures from the Fed New York’s quarterly report on household debt show that overall household debt has declined slightly over the past few months, but credit card debt is creeping up.
Credit card debt up 1.7%
By the numbers:
According to the New York Fed, credit card balances were up $21 billion in the second quarter of this year, totaling $1.26 trillion. That’s a 1.7% increase from the previous quarter. The all-time high of $1.28 trillion was reported last year.
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Late payments soared even more. The percentage of credit card debt that’s more than 90 days past due rose from 7.6% in the first quarter to 12.8% in the second quarter. The NY Fed notes, however, that "the rate of new delinquencies has remained relatively stable for almost two years."
What they're saying:
The big jump is "prompting concerns that Americans are falling behind on their debt payments at rates not seen since the Great Recession," the New York Fed said in a blog post.
How to pay down your credit card debt
What you can do:
The more money you can apply toward your monthly credit card payment, the sooner you can get out of debt. But that’s easier said than done in a time of higher prices. If you don’t know where to begin, you can get budgeting help from a financial counselor or a nonprofit credit counseling agency. Nonprofit credit counseling can be found through the National Foundation for Credit Counseling at nfcc.org.
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Experts say one place to start when it comes to credit card debt is checking your credit score to see if it’s improved since you got your credit cards. If that’s the case, you may be able to negotiate a better interest rate on your credit card, which could lower your payments or help you pay it off faster.
You may also be eligible for a balance transfer credit card with a no-interest promotional period, or a lower-interest personal loan. These can both give you a reprieve from high interest, but note that it depends on the terms you can qualify for. And in the case of balance transfer cards, the interest rate will go right back up once the 0% period ends.
The Source: This report includes information from the New York Fed and The Associated Press.