U.S. credit card debt declined in early 2023 at a slower pace than it typically does in the first quarter of each year, as high prices continued to put pressure on household budgets, according to a new report.
Card balances fell by 1.5% in the first quarter from the previous three months, data released by TransUnion on Thursday show. Balances remain near a record high and are up 19% from a year earlier.
The January-March period is typically one when consumers seek to rein in their borrowing after robust spending during the holiday season. In the 10 years since 2013, the average first-quarter drop in credit-card balances has been 3%, according to Federal Reserve data. This year, the TransUnion numbers suggest Americans haven't managed to cut back that much.
"As inflation rose to near 40-year high levels, many consumers have used credit to help manage their budgets, leading to record- or near-record high balances," said Michele Raneri, vice president of US research and consulting at TransUnion.
Economists have been closely monitoring card usage for signs of consumer stress, amid growing concern that the economy could tip into recession after more than a year of Fed interest-rate hikes.
The Federal Reserve Bank of New York is due to release its first-quarter report on household debt, including credit-card balances, on Monday.
