Americans now hold more than $1 trillion in consumer credit card debt, a phenomenon which occurs amid elevated inflation and negative consumer spending habits.

Consumer loans for credit cards and other revolving plans reached $860 billion amid the lockdown-induced recession before decreasing to roughly $735 trillion in the second quarter of 2021, according to data recently released by the Federal Reserve. Credit card debt reached levels of $986 billion in the first quarter of 2023, marking a $145 billion year-over-year increase.

David Bahnsen, the founder and chief investment officer of The Bahnsen Group, said in comments to The Sentinel that households living beyond their means is often the cause of elevated credit card debt in the United States.

“High credit card balances are a byproduct of a few things. They can be, but are not right now, something that happens when wages and jobs and savings all contract. That is a bad thing,” he said. “But generally speaking they stay at a pretty elevated level in our economy because Americans save very little and spend quite a bit. That dynamic is pretty evergreen. It is those times when the ratio of debt-to-assets and debt-to-income blows out that it becomes a problem.”

Bahnsen indeed noted that credit card debt as a percentage of household assets or household income was highest between 2002 and 2008, the years which preceded the Great Recession, even as the nominal dollar amount of credit card debt presently reaches new heights.

One survey from Bankrate meanwhile indicated that 47% of credit card holders from all age and income groups are carrying balances from month to month, an increase from 39% at the end of 2021. Some 60% of households carrying credit card balances have held the debt for more than one year, marking an increase from 50% over the past two years.

Roughly 68% of Millennials have carried credit card debt for more than one year, while 62% of Generation X and 59% of Baby Boomers have done the same. Some 39% of Generation Z, the youngest cohort which has reached adulthood, has carried debt for more than one year.

Respondents to the survey claimed that unexpected emergency expenses such as car repairs, medical bills, and home repairs were the primary causes for their credit card debt. Others said that they have used credit cards to cover their everyday expenses.

President Joe Biden has meanwhile been criticized for insisting that continued declines in year-over-year inflation indicate “good news” for families and mark “continued progress tackling inflation at the same time that unemployment remains at historic lows.” Current inflation rates are nevertheless more than double those seen at the beginning of his administration.