SACRAMENTO – American credit card debt reached an all-time high on Tuesday, especially affecting younger adults who are using their cards more. Economists expect the Federal Reserve to start lowering interest rates in September, but until then, borrowing remains costly.
In Sacramento, 32-year-old Jadell Lee is feeling the pinch. He has $30,000 in credit card debt spread across nine cards. “Credit card debt can quickly spiral out of control,” Lee said while shopping at Arden Fair Mall. When asked about his interest payments, he admitted, “I don’t know.”
Lee recently managed to get a zero percent interest rate on one of his cards, which he said “made my day.”
A new report from the Federal Reserve Bank of New York shows U.S. credit card balances hit a record $1.1 trillion in the second quarter of 2024, up 45% from 2021. Bankrate reports that 50% of credit card holders carry debt from month to month, up from 44% in January. The average balance is $6,200, with interest rates nearing 21%.
Ted Rossman, a senior analyst at Bankrate, explains that making only minimum payments on a $6,200 balance can keep someone in debt for 18 years. To manage debt, he suggests working with non-profit credit counselors or transferring balances to a new card with a zero percent introductory rate.
Some people are also taking on extra part-time jobs to help pay down their credit card debt.
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