US Credit Card Debt Nears Record High Amid Rising Costs

Americans are carrying nearly as much credit card debt as they did at the peak of last year's record-breaking borrowing spree, according to the Federal Reserve Bank of New York. The outstanding U.S. credit card balance is $1.26 trillion in the second quarter of 2026, just shy of the all-time high of $1.28 trillion recorded late last year.

Financial experts say the increasing debt likely comes down to persistent inflation and rising costs for everyday necessities. 'Inflation, rising prices, and access to other payment schemes such as Buy Now, Pay Later have all played a role. A lot of this is psychological,' Kevin Thompson, CEO of 9i Capital Group, said.

The debt avalanche method, which prioritizes paying off debts with the highest interest rates first while continuing to make minimum payments on all other accounts, is one effective approach to regaining control of debt. 'Credit card debt is often the worst kind of debt you can accrue, as interest rates now often exceed 20 percent,' Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said.