For first time ever, debt owed on credit cards in US tops $1 trillion

By Brian Williams
August 28, 2023

In a stark sign of the challenges facing working people as the crisis of capitalism deepens, credit card debt in the U.S. for the first time ever topped $1 trillion in the second quarter this year. That’s up 4.6% from the previous three months. “Compared to other debt categories this quarter,” the New York Federal Reserve said, “credit card balances saw the most pronounced worsening in performance.”

And it will keep rising as workers and farmers increasingly have to wrack up more and more debt for food, car repairs, rising rents and mortgages and all kinds of family emergencies. Inflation and sharply higher interest rates imposed over the past year have made paying down credit cards even harder.

According to Bankrate, 60% of those who carry a balance on their credit card — 54 million people — have been in debt for at least a year. These debts are assets for the bankers and capitalist investors who make big profits off the high interest rates they charge. The average interest rate on credit cards today is 20.53%, according to TransUnion.

Making minimum payments on a credit card balance of $5,733 will boost interest payments to $8,366 and keep you in debt for some 17 years. Nearly half of credit cardholders are permanently in debt, without any prospect of ever paying off their balance.