Households in the United States appear to be increasingly in debt with personal loans, mortgages, student loans, and credit card balances. Skyrocketing inflation strains the pockets of working families while rising interest rates make financial freedom more difficult.
The total credit card balance of Americans was $841 billion in the first quarter of 2022, according to the latest consumer debt data from the Federal Reserve Bank of New York. That’s a drop from $15 billion to $856 billion in the fourth quarter of 2021.
It is the first decline since the first quarter of 2021. However, it is unlikely to be the start of a downward trend, due to runaway inflation and rising interest rates.
With the decline, Americans’ credit card debt is $86 billion below the record set in the fourth quarter of 2019, when balances stood at $927 billion.
However, credit card debt in the United States remains high by historical standards. It’s also light years above the $478 billion seen more than 20 years ago in the first quarter of 1999.
THE MOST INDEBTTED STATES IN THE NATION
Experts urge credit card holders to pay your debt now before the Fed proceeds with the other increases scheduled for the rest of 2022, but that recommendation would be more urgent for residents of states like New Jersey, which has the highest average credit card debt of any state, according to LendingTree dataan online loan market platform.
| POSITION ON THE LIST | STATE | CREDIT DEBT |
| 1 | New Jersey | $7,872 |
| 2 | Connecticut | $7,721 |
| 3 | Maryland | $7,464 |
| 4 | Virginia | $7,442 |
| 5 | Hawaii | $7,246 |
| 6 | Alaska | $7,127 |
| 7 | Florida | $7,049 |
| 8 | Texas | $6,999 |
| 9 | New York | $6,973 |
| 10 | Massachusetts | $6,942 |
Overall, the national average card debt among cardholders with unpaid balances was $6,569. That includes debt from both bank cards and retail credit cards.
The four states with the most credit debt are all on the East Coast, while the three lowest are in the South.
On average, New Jersey cardholders are owing $7,872 and Kentucky cardholders are owing $5,441. That means New Jersey’s average balance is 45% higher than Kentucky’s average balance.
A DIFFICULT DEBT TO PAY
According to most recent delinquency data from the Federal Reservethe 30-day delinquency rate (or the number of people who are currently at least 30 days late on their credit card payment) increased from 1.63% to 1.73% in the first quarter of 2022.
That is the third consecutive quarter of increases. However, delinquency rates are still near historical lows, remaining below 2% for the fifth consecutive quarter. Before this streak, rates had never fallen below 2% since tracking began in 1991.
That’s a stark difference from what we saw during the Great Recession, during which delinquencies peaked at nearly 7% in 2009.
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