Credit card balances spiked in the third quarter to a record $1.08 trillion. Here’s how we got here.
The average household is increasingly reliant on credit cards to fund everyday spending. Rising consumer confidence this year drove a surge in card spending since the beginning of the pandemic. Banks responded with scaled back fees and higher signup bonuses to lure customers. Consumers made the most of it, charged up their cards with everything from groceries to furniture, as they waited for the economy to improve. All these factors combined to create a perfect storm for an all-time high in card debt.