ORLANDO, Fla. – U.S. credit card debt has climbed to $1.209 trillion in the second quarter of 2025, up 2.3% ($27 billion) from Q1, and 5.87% higher ($67 billion) than last year’s Q2 debt, according to the Federal Reserve Bank of New York.
The country’s record high reliance on credit cards underscores how inflation and sluggish wage growth continue to take a toll on American budgets.
In 2021, the data told a much different story.
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As the nation navigated the COVID-19 pandemic, the Federal Reserve reported credit card balances below $500 billion (Q2 2021), before rising to $520 billion by July 2021. That debt has been steadily climbing ever since. For those keeping score, Americans now owe $709 billion more on credit cards than in 2021, an increase of almost 142%.
And don’t think that credit card debt comes cheap. According to LendingTree.com , on average, Americans were paying an APR (annual percentage rate) of 21.16% on their credit card balances in Q2 2025.
For example, let’s say you owe $10,000 on your American Express, Mastercard, or Visa card and pay $100 per month. At a 21.16% APR, that $10,000 balance racks up about $176 in interest the first month, and that number rises each month as the balance grows. Translation: though it may feel like $100 is making a dent in that credit card debt, in the end it won’t even cover the cost of borrowing the money (it doesn’t cover the interest, much less the principal).
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After a year of $100 payments, your $10,000 debt would actually grow to $11,010.27, even after $1,200 worth of payments.
And for those of you thinking an APR of almost 25% is out of the norm, it is: Just four and a half years ago (February of 2021), average credit-card APRs hovered around 14.7%, according to data from Chase Bank.
The amount of money people owe on credit cards is on the rise as well.
Nationwide, the average unpaid credit card balance is $7,321, up 5.8% from $6,921 in Q1 2024. Geography plays a role too: New Jersey leads the nation with an average balance of $9,382, followed by Florida at $9,000. Some other states: Virginia is at number 14 ($8,153), Texas sits at number 16 ($8,042), and Michigan is at number 30 ($7,004). The state with the lowest average credit card and retail card debt: Mississippi ($5,221).
For many, it isn’t about overspending – it’s about just keeping up. According to the New York Fed, total household debt increased by $185 billion to $18.39 trillion in Q2 2025, a 1% quarter-over-quarter increase.
Inflation has pushed the cost of living higher while wage growth has lagged behind, forcing many households to rely on revolving credit to bridge the gap between income and expenses. This cycle of juggling monthly expenses is unsustainable – consumer finance experts warn that continued reliance on high-interest credit may pose broader risks to the U.S. economy if delinquencies trend upward.
What about delinquencies?
While credit card debt is hitting record levels, delinquency rates, the share of balances overdue by 30 days or more, remains steady (any increase or decrease is a good barometer of consumer financial stress). According to the Federal Reserve, credit card delinquency rates have stabilized but still hover at around 2.93%, roughly double the pre-pandemic average of 1.5% in Q4 2021.
Consumer finance experts warn this delicate balance between rising debt and manageable delinquency could tip if wage growth remains sluggish and inflation persists. Such a shift may dampen consumer spending, slow the broader economy, and potentially trigger ripple effects across credit markets. Economists warn that if inflation doesn’t ease and wages don’t catch up, more consumers could find themselves trapped in what some are calling the credit card treadmill.