U.S. consumers added a total of $67.1 billion in credit card debt during the second quarter of a financial year in 2022 amid soaring inflation, according to a new WalletHub study.
The quarterly credit card debt study is based on an analysis of the latest data on consumers’ finances from TransUnion as well as the Federal Reserve and Bureau of Labor Statistics.
The study found that the increase in credit card debt during the second quarter was three and a half times larger than the post–Great Recession average for the second quarter of the year. Meanwhile, outstanding credit card debt increased by roughly 6 percent during the same quarter compared to the previous quarter.
According to the study by the personal finance website, the average credit card debt per household in the second quarter of this year was $8,942, up from $8,558 in the second quarter of 2021, marking a 4.5 percent increase.
The rise in debt was more drastic in some states compared to others, according to the study, which found that California saw the biggest total credit card debt increase ($7,610,582,696) followed by Texas ($5,872,759,512), Florida ($4,609,647,346), New York ($4,160,718,866), and Illinois ($2,626,375,641).
States that fared “better” were Alaska ($196,520,703), South Dakota ($169,917,629), North Dakota ($155,140,457), Wyoming ($127,027,394), and Vermont ($131,966,799).
‘Quickest Economic Recovery’
Earlier this week, U.S. Treasury Secretary Janet Yellen touted President Joe Biden’s economic policies for allowing the U.S. economy to recover from the pandemic quickly, dubbing it “one of the quickest economic recoveries in modern history.”The U.S economy contracted for the second consecutive quarter in August, meaning it still remains in a technical recession.
The survey was conducted online, from Sept. 5 to Sept. 9 ,among 350 respondents, and comes as new data on August’s inflation figures are set to be published on Sept. 13.
WalletHub said it now projects that consumers will add a total of $110 billion in debt by the end of this year, and cautioned that another 75 basis-point increase by the Federal Reserve could cost credit card users an additional “$5.3 billion this year, on top of the hikes so far this year.”
“When you factor in the rate hikes from March, May, June, July, and September, credit card users will wind up paying around $20.9 billion more in 2022 than they would have otherwise,” WalletHub wrote.