Household debt soared at its fastest pace in 15 years as the use of credit cards surged, according to a Federal Reserve report.
Total debt jumped by $351 billion for the third quarter, the largest increase since 2007. Collective household debt reached a record $16.5 trillion, an increase of 2.2% from the previous quarter and 8.3% from a year ago.
The biggest contribution to that debt came from mortgage balances, which rose $1 trillion from a year ago to $11.7 trillion.
Credit card debt climbed to $930 billion. Total credit card balances rose more than 15% from a year ago, marking the largest annual jump in over 20 years. According to New York Fed officials, the increase in credit card debt “towers over the last eighteen years of data.” New York Fed officials attributed the credit card growth to “very robust” consumption, rising prices, and consumers using substantial levels of savings for consumption.