Vance Cariaga

Tue, Jun 10, 2025, 8:01 AM3 min read

This decade’s historically high inflation rate has pushed more Americans to use credit cards to pay the bills — and many are now delinquent on their payments. If these trends continue, it could bode ill for both personal finances and the U.S. economy, experts say.

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The average U.S. credit card debt per borrower rose to $6,371 during the first quarter of 2025, according to TransUnion‘s latest credit industry insights report. That represents a 26% increase from an average of $5,026 during the first quarter of 2022, when inflation was headed for its highest rate in four decades.

GOBankingRates unpacks what these findings mean for Americans’ wallets and the economy.

On the bright side, the 2025 average credit card debt was up only 2.5% from a year earlier — a slowdown from the annual increases reported in 2024 (8.5%) and 2023 (14%).

Total balances across all consumer credit products — including mortgage, auto and personal loans — rose by about 28% from Q1 2020 to Q1 2025. However, when adjusted for inflation, balance growth was closer to 3%. The TransUnion analysis also found that inflation-adjusted balances for consumers declined in real dollar terms across the majority of credit risk tiers from 2020 to 2025.

These are positive signs in terms of the rate of debt growth. But it’s still worrying that Americans continue to pile up debt in an otherwise decent economic environment where wages are rising and unemployment remains low.

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“As consumers grapple with rising costs and high interest rates, recent studies have revealed an increased reliance on credit products to help make ends meet,” TransUnion noted.

This has been a particular problem for subprime borrowers, according to Michele Raneri, a TransUnion vice president and head of U.S. research and consulting.

“This demographic has likely felt the impact of higher costs most acutely,” Raneri said in a press release. “But for other risk tiers of borrowers, their card balance growth has been less than the rate of inflation, indicating that many consumers may have further borrowing capacity.”

Subprime and low-income borrowers are also more likely to be delinquent on their credit card payments, according to a recent report from the Federal Reserve Bank of St. Louis (FRED).