The average American household now has $10,170 in credit card debt. These are the states where balances are the highest
- Americans added $43 billion in credit card debt in the second quarter of the year
- Fears about access to credit are also at record highs, according to the New York Fed
- Hawaii has the highest average debt burden, while California’s loans are rising the fastest
U.S. households now have an average of $10,170 in credit card debt as record numbers say they fear they will no longer have access to loans.
Data from the New York Federal Reserve shows that nationwide credit card debt increased by $43 billion in the second quarter of the year – the second-largest increase on record.
Meanwhile a separate one Fed investigation found that 60 percent of respondents found it more difficult to access credit – the highest level since the data series began in June 2013.
But some states are doing much worse than others, as households in Hawaii currently have the highest levels of debt, a new analysis of WalletHub. Families in the Aloha State average $10,637 in credit card loans.
This was followed by Alaska, California and New Jersey, where average debts were $10,142, $9,796 and $9,468, respectively.
A new analysis from WalletHub shows that nationwide credit card debt increased by $43 billion in the second quarter of the year – the second-largest increase ever.
By contrast, Wisconsin has the lowest debt of any state, with the average household owed $6,208.
But the data also shows that debt is rising fastest in California, where residents added more than $5 billion to their arrears in the second quarter of the year. Each household individually added about $409.
This was followed by California, Texas and New York, where households all racked up an additional $375 on their credit card debt in the second quarter of the year.
Wyoming and Vermont saw the smallest increases in their credit card debt.
Fears are mounting over the growing US debt burden after Fed data showed it had reached the $1 trillion mark for the first time in history.
And the problem is made worse by the fact that credit card interest rates are now at an eye-watering 28 percent.
The interest rate charged by credit card companies is loosely determined by the Federal Reserve’s benchmark interest rate, which rose to a 22-year high last month.
It has fueled calls to curb interest rates on such loans. Yesterday, Republican Senator Josh Hawley of Missouri urged the government to impose an 18 percent cap on credit card rates as he attacked the providers.
Senator Josh Hawley has a new populist proposal that eschews the laissez-faire Republican economics of old: He wants to put an 18 percent cap on credit card interest rates
The Federal Reserve has raised interest rates by a quarter of a percentage point, pushing borrowing costs to the highest level in more than two decades
Hawley told RealClearPolitics, “They are actively encouraging and finding new ways to get consumers into debt — they’re raising interest rates, and they can make a killing doing it.”
He added that imposing caps would be a “fair” and “healthy” approach to giving the “working class a chance”.
US concerns about access to credit are now at record levels, according to the New York Fed’s Survey of Consumer Expectations published yesterday.
Nearly 60 percent of respondents said it is more difficult to get loans, credit cards and mortgages now than it was a year ago – the highest percentage since the survey began in June 2013.