Americans Face Financial Stress as Credit Card Debt Soars

According to the Philadelphia Federal Reserve, financial well-being among Americans has diminished. From July to September 2024, the percentage of active credit card accounts making only minimum payments reached a 12-year high of 10.75%, data from leading banks indicates.

As credit card balances escalate, the proportion of delinquent balances is also rising. These statistics contrast with broader economic indicators suggesting consumer resilience and robust spending.

Andrew Kish, assistant vice president of the Financial Monitoring Group at the Philadelphia Fed, highlights the significance of these data: "These credit card trends signal consumer distress. More borrowers are experiencing payment difficulties. We will continue to monitor these metrics for insights into consumer financial health."

Economists attribute the discrepancy in data to aggregation, a collective approach that overlooks individual consumer experiences at varying income levels.

"Affluent consumer segments often mask the struggles of lower-income households," Wells Fargo economists state. "Their expenditures may bolster overall consumer spending above 2%, creating a facade of business as usual despite significant challenges for a substantial population."

For lower-income consumers, credit reliance has escalated while savings rates have declined. Wells Fargo reports that lower and middle-income households depleted emergency savings during the pandemic, and while savings have improved, they remain below pre-pandemic levels.

Economists caution that current spending levels come at the expense of financial vulnerability for the working poor.

A Resume Now survey conducted in December 2025 reveals that out of 1,065 workers, 73% face difficulty affording basic expenses, and approximately a third have incurred debt to meet those needs.

A NerdWallet study involving 2,000 adults found that households with revolving credit card debt have an average balance of $10,563. "Maintaining debt is more expensive in today's high-interest rate environment, leaving many households struggling to stay current on payments," Wells Fargo economists note.

Between July and September 2024, revolving card balances escalated to $645 billion, representing a 52.5% increase from the mid-2021 low of $423 billion. Total card balances have reached a record $914 billion since the Philadelphia Fed began monitoring this data in 2012.

According to the Philadelphia Fed, "Consumers are not only spending more, but also paying down less, which is increasing revolving debt."

Credit card balances over 30 days past due have also increased, rising from 1.57% at the pandemic low in April-June 2021 to 3.52% from July-September 2024. This represents a doubling of the delinquency rate.

Experts emphasize the challenges of eliminating credit card debt. Some recommended strategies include:

* Making more than the minimum payment whenever possible to avoid long-term debt and excessive interest charges.
* Utilizing balance transfer cards with 0% interest to eliminate debt without incurring additional interest.
* Seeking assistance from non-profit credit counseling agencies for personalized payment plans and budgeting strategies.