Americans are putting more on their credit cards and taking out fewer mortgages, as they need to increasingly borrow to cover the higher cost of everyday essentials and respond to rising interest rates.
There were a record 537 million credit card accounts in the first quarter, a jump of 31 million over the past year, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit. Meantime, mortgage originations totaled $859 billion in the first three months of 2022, the lowest in nearly two years.
While mortgages are still by far the biggest component of household debt at 71%, the data show how consumers are relying more on credit cards as decades-high inflation boosts the cost of everything from food and gas to shelter. And now that the Fed is tightening policy and mortgage rates are the highest since 2009, Americans are refinancing them much less, as well as auto debt.
