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Americans are increasingly turning to credit cards<\/a> as financial pressures mount, new reports show.<\/p>\n Collectively, credit card\u00a0balances climbed by $22 billion in the third quarter to a record $1.29 trillion, according to the Federal Reserve Bank of New York’s latest household debt report<\/a>, released Tuesday. Balances are up 4.2% from a year earlier.<\/p>\n Total household debt, including mortgages<\/a>, auto loans<\/a> and student loans<\/a>, also expanded by $334 billion for the July-to-September period to a record $19.1 trillion.<\/p>\n “Overall debt has been growing,” the New York Fed researchers said on a press call Tuesday. “This does reflect financial hardship out there.”<\/p>\n<\/div>\n The average credit card balance per consumer now stands at $6,678, up 2.4% year over year, a separate quarterly credit industry\u00a0insights report<\/a>\u00a0from TransUnion found. The number of people with credit cards rose 2% to 178 million from 174.8 million. <\/p>\n Consumers often turn to credit cards in part because they are more accessible than other types of loans \u2014 even though the average interest rate on a new credit card offer is about 24%, according to data from LendingTree<\/a>. Credit card APRs vary depending on the type of card, the issuer and the borrower’s creditworthiness. <\/p>\n “Credit cards continue to be one of the most expensive ways to borrow,” said Charlie Wise, TransUnion’s senior vice president of global research and consulting.<\/p>\n<\/div>\n Andreswd | E+ | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n Over time, an increasing share of new credit cards have gone to borrowers with lower incomes and credit scores, and “those accounts are now showing higher levels of distress,” the New York Fed researchers said in a corresponding blog post<\/a>. <\/p>\n After credit card issuers loosened their lending standards during the Covid pandemic, delinquency rates rose in the years that followed, the New York Fed researchers said on the press call.<\/p>\n “Macroeconomic headwinds \u2014 namely high inflation and rising borrowing costs \u2014 have squeezed consumers, with inflation outpacing wage growth for low-income brackets,” according to the New York Fed.<\/p>\n<\/div>\n‘One of the most expensive ways to borrow’<\/h2>\n