U.S. Credit Card Debt Hits Record $1.33 Trillion as Households Struggle Under High Interest Rates

American households are increasingly relying on credit cards to cover basic expenses, pushing total debt to an unprecedented $1.33 trillion. With nearly half of U.S. families carrying balances, the average interest rate exceeding 20% makes this one of the most expensive forms of borrowing—effectively financing survival through punitive debt.

Federal Reserve rate cuts have failed to provide meaningful relief. Despite a full-point reduction in late 2024, credit card rates only declined by 0.23%, followed by a negligible 0.09% drop after last month's quarter-point trim. The prime rate's disconnect from consumer borrowing costs leaves millions trapped in a cycle of high-interest debt.

"Credit card balances now represent the most toxic debt for American families by a wide margin," notes Ted Rossman of Bankrate. The stagnation of rate benefits underscores systemic challenges in translating monetary policy to household financial relief.