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Credit check: Is it time to worry about credit card debt?

Wells Fargo Research Team Wells Fargo

Summary

After paying off credit card debt during the COVID lockdown period, households have levered up at a pace seven times as fast as they did in the prior cycle. Revolving consumer credit, which mostly consists of credit card debt, sits at an all-time high of $1.3 trillion today. Credit card delinquencies are starting to tick higher as well amid the highest average annual percentage rate on credit card debt in data going back to the early 1980s. So, is it time to start worrying about credit card debt? In this note, we summarize the explosion in credit reliance over the past few years and put it into context of the still-relatively healthy financials of the household sector.

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Wells Fargo Research Team

Wells Fargo

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