TAMPA, Fla. — Credit card debt is entering a level the U.S. has never seen. 

Early this month, credit card debt nationwide climbed to $1.13 trillion, up from last year's record-breaking $1 trillion debt mark.

Bay area credit counseling agencies are seeing the impacts of growing credit card debt.

What You Need To Know

  • American consumers are now carrying $1.13 trillion of credit card debt, surpassing last year's record-breaking $1 trillion

  • Inflation and the loss of COVID relief for millions of Americans are partially to blame for the record debt 

  • Tampa-based debt consolidation companies are seeing a spike in traffic from people trying to pay down debt

  • The Federal Reserve so far has not cut interest rates, despite hope from the markets it would earlier this year

Debt Relief Legal Group in Tampa says it started seeing more customers struggling with debt in 2023, and those numbers have continued climbing into this year.

Attorney Alan Borden specializes in debt consolidation, mortgages and bankruptcy, and says climbing credit card debt could lead to a credit crunch for people unable to meet minimum balances.

“When you start late payments on certain cards, other cards get notice of that and then they can start shrinking your limits,” Borden said. “And so if you were at a 50 percent balance on all your credit cards and you were paying everything off but then you miss a payment, then they can lower your limits to where now you are at a 100 percent of your credit limit.  

“That will destroy your credit and you’re not going to have any credit to survive on.”

The New York Fed is reporting an increase in delinquencies on credit card balances, with a significant spike coming from younger Americans.

A credit crunch was feared last spring but never materialized because of aggressive actions by the Federal Reserve.

Financial experts say paying down debt as quickly as possible will help minimize longer range interest payments that can climb into the thousands of dollars depending on the accounts balance.