Inflation and higher interest rates boosted credit card debt to a record $930.6 billion at the end of 2022, a 18.5% jump from a year earlier, TransUnion found.
As the number of credit card accounts in the U.S. rises, more new customers are subprime borrowers, generally meaningof 600 or below, according to TransUnion, in part because of the flood of younger borrowers gaining access to credit cards.
But at the same time, delinquencies rose as lenders expand access to less-experienced credit users, the report found. TransUnion defines a delinquency as a payment that's 60 days or more overdue. "The increase in delinquencies is something to watch," Raneri said. As long as unemployment stays down, households are better able to pay their bills, she noted. "If unemployment goes up, and we see a spike in delinquencies, then that indicates a longer-term problem."How to tackle high-interest credit card debt
"Cardholders do have options, though," said Matt Schulz, chief credit analyst at LendingTree. Zero percent balance transfer credit card offers areand remain one of the best weapons Americans have in the battle against credit card debt, he said. Borrowers may also be able to refinance into a lower-interest personal loan. Those rates have climbed recently, as well, but at 10%, on average, are still well below what you currently have on your credit card, according to Schulz."Take on a side hustle, sell stuff you don't need, cut your expenses," he said. "A dollar saved is a dollar earned, and every dollar of credit card debt that you pay down has an average guaranteed, tax-free return of about 20%.
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