U.S. credit card debt hits new record high, impacting younger Sacramento adults | Call Kurtis
SACRAMENTO – American credit card debt hit a record Tuesday, especially impacting younger adults who are putting more on their credit cards.
Economists believe the Federal Reserve will start cutting interest rates in September. Until then, however, borrowing remains very expensive for Americans, including those with credit card debt.
Sacramento's Jadell Lee is among them. At 32, he has $30,000 in credit card debt on nine different cards.
"You get into credit card debt, and it gets away from you after a while," Lee said while shopping at Arden Fair Mall.
With that amount of debt on his credit cards, CBS13 and the Call Kurtis consumer investigative team asked him how much he pays in interest.
"That's a good question," he said. "I don't know."
Lee called one of his credit cards and scored a zero percent rate.
"It feels nice," he said. "It actually made my day."
A new report released Tuesday from the Federal Reserve Bank of New York revealed that U.S. credit card balances hit another record – reaching more than $1.1 trillion in the second quarter of 2024, up 45% from 2021.
Bankrate found that 50% of all credit card holders carry debt from month to month. That figure is up from 44% in January.
The average balance is $6,200 and the average interest rate is near a record high of almost 21%.
"If you make minimum payments towards the average balance, which is about $6,200, according to TransUnion," said Ted Rossman, a Bankrate senior industry analyst. "Those minimum payments keep you in debt for 18 years."
Rossman added that one way for consumers to get themselves out of debt is to work with non-profit credit counselors who can help consolidate debt.
Another option is to transfer your current balance to a new card with a zero percent introductory rate, then pay off as much as possible before the higher rate kicks in.
Some Americans are also working extra part-time jobs to bring in more cash as they strive to become free from credit card debt.