US credit card debt hits $1.26T as auto loans set record
A $21 billion surge pushed US credit card debt to $1.26 trillion, though a technical shift in reporting means headline delinquency rates overstate current consumer stress.
US credit card balances jumped $21 billion in the second quarter of 2026 to reach $1.26 trillion, according to data released Tuesday by the Federal Reserve Bank of New York. The figure places total card debt just $20 billion shy of the all-time high set in late 2025. The increase came even as total US household debt edged down $13 billion to $18.8 trillion.
The broader household debt contraction was driven entirely by mortgage balances, which fell $74 billion to $13.1 trillion. Outside of real estate, consumer borrowing continued to expand. Auto loan balances rose $28 billion to a record $1.71 trillion, while home equity lines of credit increased $13 billion to $459 billion. Student loan balances bucked the borrowing trend, declining $7 billion to $1.65 trillion.
For credit market investors and bank risk officers, the most critical takeaway lies in the mechanics of the reported delinquency rates. The share of card balances at least 90 days overdue climbed to 12.8% in early 2026, up from 7.6% in mid-2022. However, New York Fed researchers warned this headline figure is skewed by a backlog of old, charged-off debts lingering on credit reports rather than a fresh wave of defaults.
By 2024, 80% of charged-off balances remained visible on credit reports a full year after being written off. During the 2004 to 2012 period, only about 40% remained visible for that long. Stripping out these legacy charge-offs shows actual consumer repayment behavior aligning much closer to the rate of new delinquencies, which has largely flattened since early 2024.
"Delinquency rates across most products have held steady over the past two years," said Joelle Scally, Economic Policy Advisor at the New York Fed. "Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we'll continue to monitor."
The underlying strain on household balance sheets remains a structural concern for lenders. Approximately 60% of the 175 million Americans with credit cards do not pay off their balances monthly, leaving them to carry persistent interest-bearing debt. New York Fed researchers characterized this dynamic as evidence of a "K-shaped economy," where a significant portion of households lack a meaningful financial cushion between paychecks.
