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US credit card customers are saddled with $1.28T in debt

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US credit card customers are saddled with $1.28T in debt

U.S. credit card balances reached $1.28 trillion by the end of the fourth quarter, marking a $44 billion increase in debt over the three-month period, according to data released Tuesday by the Federal Reserve Bank of New York.

Summary

  • The increase reflects growing reliance on credit cards as household finances remain under pressure.
  • Balances are up 5.5% year-over-year.
  • The figures are part of the Fed’s quarterly household debt report, which monitors credit cards alongside mortgages, auto loans, and student debt.

The figures represent the highest level of credit card debt on record for American consumers. The quarterly increase reflects growing reliance on credit cards as household finances face continued pressure.

Year-over-year data showed balances climbed 5.5% compared to the same period in 2023, according to the Federal Reserve Bank of New York report.

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The Federal Reserve Bank of New York releases quarterly reports on household debt and credit as part of its ongoing economic monitoring activities. The data tracks various forms of consumer debt including mortgages, auto loans, student loans and credit card balances.

Credit card debt represents one component of total household debt in the U.S., which includes multiple categories of consumer borrowing tracked by federal banking authorities.

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Crypto World

Fed’s Barr Calls for Balanced US Stablecoin Rules Under GENIUS Act

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Federal Reserve, Legislation, United States, Stablecoin, Genius Act

US Federal Reserve Governor Michael Barr said Tuesday that clearer US stablecoin rules could speed the market’s growth, but warned that regulators still need to address money laundering risks, bank run risks and consumer safeguards as they implement the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

Speaking at a Federalist Society event on stablecoin regulation, Barr said the law provides “needed clarity” for issuers, but that “a great deal will depend on how federal and state regulators implement the statute.”

Barr said stablecoins are still used mainly for crypto trading and as a US dollar store of value in some foreign markets, though they could also lower remittance costs, speed up trade finance processing and help firms manage treasury operations. He also highlighted the risk of bad actors buying stablecoins in secondary markets without identity checks, and said issuers may be tempted to stretch for yield in reserve assets in ways that undermine confidence during stress.

Barr’s speech also cast the stablecoin debate in historical terms. He said private money has a “long and painful history” when safeguards are weak, pointing to the Free Banking Era in the US, the Panic of 1907, money market fund stress during the global financial crisis and COVID-19 shock, and more recent stablecoin valuation pressure as reasons to be cautious about any asset marketed as redeemable at par on demand.

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Barr’s remarks come as US agencies move from legislation to rule-writing. The US Treasury Department opened a second round of public comment on implementing the GENIUS Act in September 2025, saying the law must be translated into rules that both encourage innovation and address illicit finance, consumer protections and financial stability risks.

Federal Reserve, Legislation, United States, Stablecoin, Genius Act
Brief Remarks on Stablecoins. Source: Federal Reserve

Fed Vice Chair for Supervision Michelle Bowman told lawmakers in February that banking regulators were already working on capital and liquidity rules for stablecoin issuers, and Federal Deposit Insurance Corporation chair Travis Hill said in March that the agency does not expect stablecoins to receive deposit insurance under the law.

Related: Who gets the yield? CLARITY Act becomes fight over onchain dollars

Barr warns GENIUS Act rollout will test stablecoin safeguards

Barr’s speech signals where the implementation fights may land. He flagged reserve asset rules, regulatory arbitrage, the scope of issuer activities beyond issuance, capital and liquidity requirements, Anti-Money Laundering (AML) checks and consumer protection standards as the key issues still to be settled.

The GENIUS Act, signed into law on July 18, 2025, created a federal framework for payment stablecoins in the United States. The law requires issuers to maintain one-to-one backing with reserve assets such as US dollars and Treasury bills, and is expected to take effect 18 months after signing or 120 days after final agency rules are completed.

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Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026