Opinion: How Issuers Risk Killing the Golden Goose by Ignoring Mounting Borrower Strain

Look at the nation’s credit card balances, and it can be hard to know exactly what to think.

On the one hand, we have eye-popping figures like $1.28 trillion from the Federal Reserve Bank of New York, an all-time high for household credit card balances. On the other hand, you have analyses showing real average cardholder balances ($5,276, by the way) are essentially flat since 2014, using data from the Consumer Financial Protection Bureau.

So, are we drowning in credit card debt, or are we not? And what is this information really telling us about the health of our balance sheets?

Real average cardholder balances are essentially flat since 2014; household credit card balances are at an all-time high.

The key point is that both things can be true at the same time. Yes, national total credit card balances can be at record levels, while average cardholder balances are more or less the same — thanks to high inflation and a larger pool of borrowers that has risen by millions over the past decade. 

Since the price of almost everything has been going up, it’s only natural that credit card balances would rise as well over time. As a result, only inflation-adjusted figures give an accurate long-term picture of what’s going on.

Fair enough. However, there is more to this story if you dig a little deeper. 

Specifically, what are the costs of carrying that debt? And what are households telling us — either in surveys, or implicitly in delinquency rates — about how well they are able to manage that debt?

That’s where things get worrisome — fast. Let’s start with average credit card interest rates: We’ve all become used to numbers around 20% (19.58% to be specific, according to the latest figures from Bankrate). Store cards are even worse, by the way, with averages over 30%.

But it didn’t used to be that way. A decade ago, that figure was actually below 14%, for instance.

That means the cost of carrying that debt from month to month has risen. For households that are already hard-pressed to make money last to the end of the month, this is serious business.

To get a sense of how this is affecting bottom lines, just listen to what consumers are saying. The National Foundation for Credit Counseling compiles a Financial Stress Forecast, between 0 and 10, on how households are faring. Its prediction for 2026’s first quarter: The highest stress levels in the history of the survey.

Another window into how we’re doing: credit utilization ratios, or how much of our total credit access we’re actually using. The most recent figures indicate the national average is 29%, according to credit agency Experian.

The cost of carrying debt from month to month has risen.

That’s bumping up against the 30% threshold, a common rule of thumb as a figure you don’t want to exceed before it starts harming your credit score. Those with poor credit are in especially dire straits, using over 80% of their available credit — in other words, pretty close to maxed out.

If you prefer harder data on whether people are falling behind on their bills — that information is available, too, and it’s not pretty. 

Household debt in some form of delinquency rose to 4.8% in 2025’s fourth quarter, the highest level since 2017, according to the Household Debt and Credit Report. Zoom in on credit cards, and serious delinquencies beyond 90 days are at levels not seen since the financial crisis of 2008-2009.

Looking ahead doesn’t offer much relief. The Office for Economic Cooperation and Development is projecting that inflation levels will rise above 4% in the U.S., thanks to fallout from the war in Iran. Throw in other issues like layoffs at levels not seen since the height of the pandemic, and there’s no denying the consumer is being squeezed on multiple levels.

That’s the challenge ahead of us. Witnessing that inflation-adjusted credit card balances are relatively flat over time, and thinking that there is essentially ‘nothing to see here,’ is the simpler path because it frees us from empathizing with borrowers and having to come up with complex solutions.

The harder work is to identify these pain points, and understand how it is affecting Americans in very real and disturbing ways. After all, if borrowers continue to falter under these debt burdens, the fallout won’t be limited to just those families. The ramifications for the broader economy will be deep and wide.

In the short-term, of course, it benefits financial institutions to have record debt owed to them at such lofty rates. Longer-term, the risk is the killing of the fabled golden goose.

The smarter choice is to recognize the widespread financial distress that’s developing right in front of our faces. Consumers are telling us they’re in trouble, and we would be wise to listen.