More Tags

Subscribe to Email Updates

Popular Stories

The Quick On Visa’s 8-Digit Bin Migration
Crypto-as-a-Service (CaaS)
The State of P2P Fraud Chargebacks
Biometric Authentication Adoption by Credit Unions
AI Voice Cloning Becomes a New Threat
Written by Cyndie Martini
on January 04, 2022

Credit card balances took a dive in 2020. They are now on the rise and heading back to pre-pandemic levels. Just before the pandemic started, credit card balances stood at $923 billion. The previous peak was around $870 billion at the beginning of 2008  (i.e., start of the Great Financial Crisis).

For Q3 of 2021, credit card balances came in at $800 billion, or $123 billion below pre-pandemic levels. Despite this, Q3 marks the second quarter in a row of gains, with Q3 adding $17 billion, according to the Federal Reserve Bank of New York. Credit card balances troughed at the beginning of 2021 and have been rising since.

Compared to Q3 of 2019, US consumer debt was $1.1 trillion higher, coming in at $15.2 trillion. Consumers hold 520 million credit accounts, providing $3.2 trillion in available credit. During the second quarter of 2021, 51% of active accounts carried a balance, according to data from the American Bankers Association.

The 30-day delinquency rate rate dipped by 0.01% to 1.57% for Q3 2021, which is the lowest number since tracking began in 1991.

The impact of growing credit card balances was felt in the October retails sales report. October retail sales jumped by 1.7% for a year-over-year change of 16.3%. Given that the consumer savings rate is back to pre-pandemic levels, stimulus checks have ended, and extended unemployment benefits are over as well, how did the consumer do it? The answer is credit cards.

Although not just credit cards. Increasing wages played a part as well. We also have the monthly child tax credit providing some spending power for consumers.

Despite recent downward trending consumer sentiment surveys, increasing credit card balances say consumers are confident about the future. The expectation is that credit card balances will soon reach pre-pandemic levels.


Let Us Know What You Thought about this Post.

Put your Comment Below.

You may also like:

Credit Cards

Credit Card Spending Trends

Average credit card debt per person peaked in Q4 2019 at $3,700, according to data from the Federal Reserve Bank of New ...

Credit Cards

2022 Credit Card Trends

While it is still early in the year, we can already make a few assumptions about what consumers will be doing with their...

Credit Cards

Card Magnetic Stripes Get The Boot

Credit and debit card magnetic stripes are basically relics. But in the U.S., they are still ubiquitous because our paym...