Credit card balances are growing faster than borrowers can pay them down

Minimum payments on credit card debt now primarily cover interest rather than principal. This occurs as average credit card APRs range between 24% and 31%. Total U.S. credit card debt has reached a record $1.2 trillion, with the average borrower carrying $6,700 in debt. The strain is driven by inflation increasing the cost of essentials, which forces borrowers to use credit cards to cover basic living expenses. Balances are growing faster than they can be paid down, leading to late payments on credit cards and auto loans at levels not seen since the Great Financial Crisis.