Experts say people are stretched with an average consumer carrying $6,329 in credit card debt.

• The Federal Reserve Bank of New York reported Tuesday that Americans collectively owe $1.14 trillion on their credit cards.
• A new report by TransUnion reveals that the average credit card balance is now $6,329.
• Both reports indicate that as consumers increasingly rely on credit cards, an increasing number of borrowers are struggling to make their payment on time.

Credit card debt is on the rise.

The Federal Reserve Bank of New York reported on Tuesday that Americans' credit card debt has reached a record $1.14 trillion.

A quarterly credit industry insights report from TransUnion shows that the average balance per consumer increased by 4.8% year over year to $6,329.

The New York Fed and TransUnion found that credit card delinquency rates are higher across the board. Approximately 9.1% of credit card balances transitioned into delinquency over the past year, according to the New York Fed.

People who have revolving debt are typically using their credit cards to their full limit, according to Michele Raneri, vice president and head of U.S. research and consulting at TransUnion, which suggests they are under financial strain.

Time to 'reassess' revenge spending

According to Ted Rossman, Bankrate's senior industry analyst, credit card balances briefly decreased in 2020 and early 2021 due to pandemic-related factors such as government-supplied stimulus checks and limited spending opportunities.

Credit card balances have increased by 48% since early 2021, due to a surge in spending on services, high inflation, and high interest rates, according to him.

A recent report by Bankrate reveals that consumers have displayed a remarkable eagerness to spend on travel and entertainment to reclaim the experiences they missed during the Covid years.

"Maybe people can reassess that now," Raneri said.

Several years have passed since the increase in "revenge spending," she stated. "Perhaps, there is a way to reposition it so that they can fulfill some of the things they feel they missed and return to normal."

The "underconsumption core" is gaining popularity, and the recession is making a comeback. Despite inflation cooling down, more Americans are facing financial difficulties.

One of the most costly ways to borrow money is through credit cards, with the average charge being over 20%, close to a record high.

Rossman emphasized the urgency of paying off credit card debt, as balances reach record highs and interest rates approach all-time lows.

He advised paying off high-interest credit cards with a lower interest personal loan or an interest-free balance transfer credit card if you're carrying a balance.