Credit Card Debt Study

Consumers added $29 billion in credit card debt during the second quarter of 2026

The Federal Reserve released its latest Consumer Credit report today at 3 p.m., and WalletHub’s analysis of the data reveals that consumers added $29 billion in credit card debt during the second quarter of 2026. Key highlights from WalletHub’s new Credit Card Debt Study are outlined below. You can also check out the results of WalletHub’s projections for how a September rate hike could affect our wallets.

Credit Card Debt Study Key Findings

• Q2 Results: At $29 billion, the increase in credit card debt during Q2 2026 was around 3% larger than the increase in Q2 2025.
• Q2 vs. the Record: Total credit card debt as of Q2 was roughly $1.37 trillion on an inflation-adjusted basis, or around 12% below the record high.
• Household Debt: The average household credit card balance was around $11,313 at the end of Q2 2026, after adjusting for inflation. That’s $2,139 below the record high.
• First Look at Q3: Preliminary data for July 2026 shows a $46 billion increase from last year but almost no change after adjusting for inflation.
• Best Balance Transfer Credit Cards: The best balance transfer credit cards currently offer 0% APRs for up to 21 months, with no annual fees and low balance transfer fees.

See the complete findings of WalletHub’s Credit Card Debt Study.

Projected Impact of a Fed Rate Hike

• Consumer Costs: Credit card users will pay roughly $2 billion more in interest over the next 12 months if the Fed raises its target rate by 25 basis points on September 16 (60% probability).
• Mortgage Impact: WalletHub expects the average 30-year mortgage to get $9,720 more expensive over the life of the loan if the Fed hikes its target in September.
• Auto Loan Rate Rise: WalletHub expects the average APR on a 48-month new car loan to rise by around 12 basis points in the months following a 25-basis-point Fed rate hike.

See the full results of WalletHub’s Fed Rate Analysis.

“The credit card debt problem is getting worse at a slower rate. That’s progress but probably not at the pace most consumers are looking for. People with high-interest debt who still have a good or excellent credit score – think 700+ – can take things up a notch with a 0% balance transfer credit card. That can give you as long as 21 months without interest, making it easier to pay off what you owe.

Most of us could also benefit from better budgeting habits. Careful budgeting is a tried and true method for achieving financial success, and we have some new tech to make things easier. Budgeting apps have come a long way, and the right one can keep you plugged in and on target without a lot of legwork.

At some point, we have to start consistently paying down what we owe. Slowing the rate of decline isn’t going to cut it, especially if the Fed starts increasing interest rates again.”

– John Kiernan, WalletHub Editor

Tips For Managing Credit Card Debt

Make a Budget & Stick to It

It’s difficult to spend within reason or plan savings if you don’t know how your monthly spending compares to your take-home pay, or where that money is going. That is why you should rank-order your expenses – including debt payments, emergency fund contributions, and other savings – and trim the fat, if necessary.

Most importantly, once you develop your budget, make sure to stick to it or else you’ll have simply wasted your time. Using a budgeting app can make the whole process much easier to manage. There are several good budgeting apps available to consumers for free or at a low cost. For example, WalletHub’s free budgeting tools can help you get organized, set up your budget, and analyze your performance. Taking ownership of your budget can help you free up some room for emergency fund contributions and debt payments so you can get out of debt and stay there.

Build an Emergency Fund

With a safety net of cash to fall back on, you won’t be as likely to fall behind on your bills in the event of emergency expenses or unplanned joblessness. Your goal should be to gradually save about a year’s worth of after-tax income. In other words, set aside a little bit every month until you’ve got a nice cushion.

Separate Your Everyday Expenses From Your Debt

When you carry a credit card balance from billing period to billing period, you lose your grace period for new purchases. That means interest starts applying to new purchases right away. But if you use one card for ongoing debt and another for everyday purchases that you can pay off by the due date, the everyday purchases should never accrue interest charges.

Plus, you can save 1% to 2%+ on every purchase with the right rewards card. You might also save a couple hundred dollars with an initial bonus. And if you plan to pay the bill in full monthly, the interest rate won’t matter.

Repay Your Most Expensive Debt First

Most people with serious credit card debt have multiple balances. If that’s the case for you, try the “avalanche method.” That means putting the majority of your monthly debt payment toward the balance with the highest interest rate and making the minimum payment required on the rest. Once your most expensive debt is paid off, repeat the process until you’re debt-free.

Use a Balance Transfer Deal to Lower the Cost of Existing Debt

The best balance transfer credit cards can give you a break from interest charges for as long as 21 months, and attractive offers are accessible to individuals with fair credit or better. A prolonged 0% introductory period can yield significant savings on interest, helping you get out of debt faster.

Try the Island Approach

The Island Approach is a strategy that involves using a collection of credit cards, with each serving a specific purpose. For example, you could transfer your existing debt to a 0% balance transfer credit card to save on finance charges and get out of debt sooner. And you could use a rewards card or two – perhaps one with travel rewards and one with cash back, or maybe a store credit card – for purchases that you’ll be able to pay off by the end of the month.

This will enable you to get the best possible collection of terms. It will also tell you when you’re overspending. Finance charges on your everyday spending cards will signal a need to cut back.

Reevaluate Your Job Situation

In some cases, all the budgeting and planning in the world won’t be enough to solve your debt problems. You may need to explore whether higher-paying opportunities exist for people with your background or consider acquiring some new skills to make yourself more marketable. This may require a bit of an investment in yourself, but as long as you get a worthwhile return, it’s money well spent.

Improve Your Credit

This might sound a bit counterintuitive, seeing as more credit could mean more debt. But improving your credit standing will have a dramatic impact on the cost of your debt. People with higher credit scores tend to pay lower interest rates. For example, the average APR among credit cards for people with fair credit is 27.01%, while the average for people with excellent credit is 17.09%, according to WalletHub’s database of 1,500+ credit card offers. Having good or excellent credit also makes it easier to get credit cards with a 0% introductory APR.

In addition to helping you get out of debt sooner, better credit can make it easier to find a job or a place to live, both of which impact your bottom line. You can check your latest credit score for free and get personalized credit-improvement tips on WalletHub.