Americans Have More Credit Card Debt Than Ever

**Jessica Mendoza** (0:05)
Melissa Megason lives in South Portland, Maine, where she's worked as a medical assistant for most of her career.

**Melissa Megason** (0:11)
We lived paycheck to paycheck as many middle class people do here in Maine, but we were able to manage it.

**Jessica Mendoza** (0:20)
For a long time, Melissa and her then husband felt like they had a pretty good handle on their finances.

**Melissa Megason** (0:26)
We would use credit cards if we needed to for emergencies, especially with four dogs come time to go for their annual physicals and shots and all that stuff.
That would be the type of stuff we would put on there. We never took vacations. Actually, we shared a vehicle for the longest time.

**Jessica Mendoza** (0:43)
But then, Melissa's life took a turn, and she found herself pulling out her credit cards more and more often. The debt started piling up.
At its peak, what was the number that you were looking at in terms of what you owed to credit card companies?

**Melissa Megason** (0:58)
The peak would have been just a little over $20,000 for me.

**Jessica Mendoza** (1:02)
Melissa makes about $65,000 a year, so her credit card debt was almost a third of her income. And how did you feel or what were you thinking when you saw that amount when it really sort of dawned on you?

**Melissa Megason** (1:16)
I was shocked because you don't realize it. But then you start thinking about it. A lot of it is late fees, over limit fees, late fees, over limit fees, every month that you don't pay.
And so those keep adding up. It's like quicksand. You just keep going lower and lower and lower.

**Jessica Mendoza** (1:34)
Melissa found herself in a hole, one that more and more Americans are falling into.

**Dan Frosch** (1:40)
$1.25 trillion in the first quarter of 2026 That's the total credit card balance that American credit card holders have. That was the highest first quarter balance that the New York Federal Reserve had ever recorded.

**Jessica Mendoza** (1:57)
Our colleague Dan Frosch writes about the economy. And he says that record number means Americans have $70 billion more in credit card debt than they did at the same time last year.
As the debt rises, more and more people are delinquent, which means making their payments late or not at all.

**Dan Frosch** (2:15)
Typically people who don't have significant financial means will let credit cards slide first. But we also saw through the data that folks who were middle class or even upper income were struggling with delinquencies more than they had in years past as well. And so we have this massive sort of astronomical number in the first quarter that is unprecedented. So these delinquencies seem to be sort of telling us a very clear story.

**Jessica Mendoza** (2:45)
And what story is that?

**Dan Frosch** (2:46)
The story is that Americans are having a much harder time paying off their debt right now. And this is happening across all income levels.

**Jessica Mendoza** (2:56)
Welcome to The Journal, our show about money, business and power. I'm Jessica Mendoza. It's Friday, June 5th.
Coming up on the show, why Americans are racking up more credit card debt than ever.

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**Jessica Mendoza** (4:04)
The average American carries about $6,500 in credit card debt, and the number of people with significant debt is going up. As of last year, about 20% of card holders had a balance of over $10,000.
Dan, what do we know about what's driving this increase in credit card debt?

**Dan Frosch** (4:23)
Generally, we know that the cost of living has risen, in some cases, marketly, when it comes to sort of household goods, groceries, things that you need, right? On the flip side, people's wages have gone up as well.

**Jessica Mendoza** (4:37)
But recently, inflation has been growing faster than wages.

**SPEAKER_5** (4:41)
And while inflation continues to climb, wage growth is slowing, leaving many Americans struggling to stay afloat.

**Jessica Mendoza** (4:47)
When inflation goes up, everyday life becomes more expensive.

**Dan Frosch** (4:51)
That creates a situation where folks are having to spend more of their income on things that they need. Things like food, or utility bills, or their rent.