American credit card debt climbs to record $1.33 trillion

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The total debt Americans owe on their credit cards has just hit an eye-watering $1.33 trillion, a new record high that shows how deep household borrowing has gone in 2025. The data, which came from CardRatings.com, reflects how average families are leaning on credit cards to cover everyday costs with the Federal Reserve’s rate cut doing nothing to ease the pain, and the numbers reveal that relief is still far out of reach for millions. Nearly half of U.S. households now carry credit card debt, paying over 20% interest on average, as it becomes one of the most expensive ways to borrow, for financing survival. “For millions of American households, credit card debt represents their highest-cost debt by a wide margin,” said Ted Rossman, senior industry analyst at Bankrate, describing how widespread and costly revolving balances have become. Fed rate cuts bring almost no real help Most credit cards have variable interest rates, which means their rates usually follow the Fed’s benchmark. When the Fed lowers its rates, the prime rate drops too, and that should bring down interest rates on credit cards within a billing cycle or two. But that isn’t happening. When the Fed cut rates by a full point in late 2024, the average credit card rate only slipped by 0.23% during that same period. And when the central bank trimmed another quarter point last month, the average rate fell by just 0.09%, landing at 24.22% for the third quarter. “Consumers hoping for an automatic, proportional drop in their credit card interest rates may be disappointed,” said Jennifer Doss, executive editor at CardRatings.com. She explained that the link between Fed policy and card APRs is often weaker than people assume, adding that “credit card rates are heavily influenced by credit conditions and individual credit scores.” Jeff Sigmund,…