Americans’ total credit card debt reached $1.29 trillion in the third quarter of 2024, an increase of $22 billion from the prior quarter, according to the Federal Reserve Bank of New York’s latest Household Debt and Credit Report. Total household debt, including mortgages, student loans, and auto loans, rose by $334 billion to $19.1 trillion during the same period.
The surge in credit card balances comes as Americans face elevated living costs and declining savings. The U.S. personal savings rate fell to below 4% of total income, down from pre-pandemic levels, while aggregate delinquency rates on credit cards rose slightly to 5% in the third quarter. The average outstanding credit card balance per consumer stands at $6,678, according to TransUnion data.
Holiday spending pressures
Retailers and analysts anticipate a 5% increase in holiday spending this year, with the National Retail Federation projecting total November-December sales to reach $1.01 trillion. A KPMG survey found that 73% of consumers plan to use debit cards for holiday purchases, while 24% expect to rely on buy-now-pay-later options for more than 21% of their spending. The average expected holiday budget is $783, though KPMG notes that persistent price pressures continue to strain household budgets.
Corporate and policy responses
Food and beverage giant Kraft Heinz indicated it would limit price increases to accommodate consumers facing financial strain. Steve Cahillane, the company’s CEO, stated on an earnings call that the firm aims to “meet consumers where they are” amid affordability concerns. Meanwhile, consumer finance analysts warn that high costs have depleted savings and forced many to rely on debt to cover essential expenses.
Broader economic context
Total household debt has grown by $5 trillion since the end of 2019, driven by rising costs for housing, vehicles, and education. Auto loan balances alone exceed $1.7 trillion, with the average monthly payment for new cars surpassing $1,000 for some borrowers. Longer repayment terms have increased total interest payments on auto loans to $9,938 per loan.
Delinquency trends
While overall delinquency rates remain relatively low, the share of credit card debt transitioning into serious delinquency has shown slight improvement after a sharp rise between 2022 and 2024. Researchers caution that the approaching holiday season could further strain household finances, potentially leading to higher default rates in early 2025.