$1 Trillion in Credit Card Debt. Is the US Consumer OK?
Is the US Consumer OK? Five key points:
1. Large-bank consumer credit card balances are approaching $1 trillion, but delinquency rates remain within long-term historical ranges.
2. Minimum-payment behavior has ticked up, but is still not far outside its normal band.
3. Household debt service payments, as a share of disposable personal income, have returned to pre-COVID historical levels.
4. Despite record credit card balances, rising disposable income and steady spending suggest the consumer remains generally stable—though individual stress is very real.
5. Disposable income grew faster than overall debt in both ’23 and ’24. This is on track to happen again in ’25.
The Consumer – and the US economy – appears to be in good shape.
$1 Trillion in Credit Card Debt. Is the US Consumer OK? – Links
FRED (St. Louis Fed) Links:
https://fred.stlouisfed.org/
https://fred.stlouisfed.org/series/RCCCBBALTOT
https://fred.stlouisfed.org/series/RCCCBSHRMIN
https://fred.stlouisfed.org/series/RCCCBACTDPD30P
https://fred.stlouisfed.org/series/RCCCBACTDPD90P
https://fred.stlouisfed.org/series/TDSP
Wall Street Journal & Bank comments (paywall)
Bureau of Economic Analysis (BEA.gov)
Disposable Income & Personal Outlays (Spending)
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Transcript for “$1 Trillion in Credit Card Debt. Is the US Consumer OK?”
$1 Trillion in Credit Card Debt. Is the US Consumer OK?
A lot of the information that I used to put together this video comes from a database called FRED. It’s the St. Louis Fed… the Federal Reserve Bank of St. Louis.
First data point that I want to touch on is this is:
A reading of large bank consumer credit card balances. Now, this is only large banks, so it doesn’t include credit unions, doesn’t include local banks, and you can see the credit card balances.
These are total balances issued through large bank. This total balance here in 2025 is starting to get over $900 billion and coming close to a trillion dollars.
The next point that I want to share with you is, again, this is reported by the large banks, on their consumer credit card balances.
This is the share of accounts that are making only the minimum payment. So I have to be honest, I don’t like the trend!
But it’s not all that far out of range right now.
You can see that, this is coming in just a little under 11%.
The next item that I want to show you is, again, just data from large banks, consumer credit card balances that are now 30 days or more past due.
And you can see that for 30 days… the prior range was between 1.2% and 1.6%. Meaning about one and a half percent of credit card balances are usually running about 30 days delinquent, or past due.
Now, it had been higher in 2024. But now we’re back to 1.6%.
Still, I am not crazy about the trend. But these numbers are not totally out of whack.
The next data point that I want to show you is these are, again, large bank consumer credit card balances, where the balance is now 90 days delinquent.
So these are credit cards that are seriously delinquent.
Again, this looks really similar to what you see with the 30 day trend.
Historically, not a lot has changed.
So, what are the banks trying to tell you?
Well, if you go to … this is a story that was in the Wall Street Journal just a few weeks ago.
This says the nation’s biggest banks are saying the economy is still strong.
And you can see this is October 15th. So this was about four or five weeks ago. Not a very long time ago.
But you can see… one of the things that they point to is that higher spending points to… in addition to deal making, points to a healthy economy.
And they’ve got a couple of quotes here that got my attention.
“You see, strong consumer spending and stable deposits and those things just kind of paint a picture of a consistently strong consumer.” That’s the chief executive at Wells Fargo coming out with that.
A little further down in the column, this is from the CEO of Synchrony Financial. He went on to say that “spending was still increasing, but delinquencies and late payments are down.”
And then he added a comment: “Look, we still think the consumer is in pretty good shape. They’ve been very resilient. We’re not really seeing any signs of weakness.” in this.
Back to FRED.
This shows household debt service payments… as a percentage of disposable personal income.
So, how much money is coming out of your pocket every month… not your paycheck… but what’s coming out of your pocket every month to pay the bills… to make debt service payments?
And you can see that has historically, this chart goes back 40 years… to the early eighties….
You can see that there was a range there somewhere above 10, but, sticking around 10 to 12.5% of your disposable personal income was going towards debt payment.
It did spike in the previous decade, 2005 through 2011, and then started to come down.
Of course this came way down during COVID. When everybody got free money.
But look at what’s been happening here in the last two years.
This number is now just over 11%.
Historically, we’re back to the range that we had been in for a very, very long period of time.
So it looks like debt service – and debt service payments are – seem to be under control.
That would indicate that the consumer is still in fairly good shape.
Here’s another chart that I wanted to show you.
This is from the Bureau of Economic Analysis, or BEA.gov.
This shows (disposable) personal income on a quarterly basis for the last few years.
This is a nice, organized, steady, steady looking chart. It looks really nice.
You can see disposable income steadily climbing over the last couple of quarters. And definitely over the last few years.
Now we’re going to include personal outlays.
Meaning, this shows disposable personal income. Here’s what happens when you add in spending, where the spending goes again. Same type of steadily climbing, you know, increasing, as we’re going quarter over quarter.
In the aggregate, spending continues to climb steadily. We’re not crazy about that.
But DPI also, you know, disposable personal income, continues to outpace spending.
This indicates to us that the consumer is still in overall pretty good shape.
We have to acknowledge that credit card debt has never been this high before (in dollar terms).
And we all know plenty of personal anecdotes and personal stories where people are struggling like never before.
So we certainly don’t want to make light of what’s happening to individuals whatsoever.
But, we don’t want to let the facts get misconstrued.
And we wanted to show you some of the data that we look at as well, to kind of help keep things in perspective.
