Dan Frosch

$1.25 trillion in the first quarter of 2026.

That's the total credit card balance that American credit card holders have.

That was the highest first quarter balance that the New York Federal Reserve had ever recorded.

Typically, people who don't have significant financial means will let credit cards slide first.

But we also saw through the data that folks who were middle class or even upper income were struggling with delinquencies more than they had in years past as well.

And so we have this massive astronomical number in the first quarter that is unprecedented.

So these delinquencies seem to be sort of telling us a very clear story.

The story is that Americans are having a much harder time paying off their debt right now.

And this is happening across all income levels.

Generally, we know that the cost of living has risen, in some cases, markedly, when it comes to household goods, groceries, things that you need.

On the flip side, people's wages have gone up as well.

that creates a situation where folks are having to spend more of their income on things that they need, things like food or utility bills or their rent.

And so they end up dipping into financial resources that they otherwise didn't have to use.

Putting groceries on your credit card where previously maybe you were using your debit card or paying cash for them, right?

That's sort of the baseline level of people's financial experience.

But then you throw in something else.

like a car repair, right, or a house repair, or something that needs to happen but is going to cost you more than your groceries or your run-of-the-mill shopping trip.

Now you're in real trouble, right, because you've already not paid off these sort of lower-level balances, and now you're being faced with a much higher expense that's going to drive your minimum balance way up.

They're not only spending more and have less money to pay off their debt.

But the interest rates on these credit cards make it such that you're not simply paying back the money that you've borrowed on your credit card.