Credit card balances spiked in the third quarter to a record $1.08 trillion. Here’s how we got here.

The rise in credit card balances can be attributed to a variety of factors, including improved consumer confidence, increased consumer spending, and increased access to credit.


First, the reopening of businesses during the third quarter boosted consumer confidence and allowed individuals to return to their pre-pandemic spending patterns. As a result of this improved confidence, consumers began spending more on items paid for with their credit cards, resulting in an uptick in the amount of outstanding credit card balances.

Second, access to credit has been more readily available in the third quarter due to decreased interest rates. This has allowed consumers to either borrow more funds for their purchases or take advantage of promotional offers that allow them to pay no interest for a set amount of time.

Finally, many financial institutions have increased their credit limits to accommodate consumers’ increased spending. A higher available credit limit allows customers to extend their purchasing power and spend more on items charged to their cards. Therefore, it is not uncommon to see many consumers taking full advantage of their extended credit limits, resulting in higher credit card balances.

Overall, the combination of increased consumer confidence, access to credit, and higher credit limits resulted in a record high for credit card balances in the third quarter.

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