New Federal Reserve data shows Americans are adding to their credit card balances, though not as fast as last year.
According to a new WalletHub analysis, that may be a sign that shoppers are getting their financial house in order ahead of the holiday season.
In the third quarter of 2025, U.S. credit card debt rose by $24 billion, bringing the national total to $1.23 trillion. However, once inflation is factored in, WalletHub says the increase is closer to $16 billion, suggesting consumers aren’t taking on as much new debt as the raw number implies.
“That might sound like a lot, but it’s actually about 48% smaller than the increase in Q3 last year,” said John Kiernan, WalletHub’s managing editor. “So comparatively speaking, we’re doing leaps and bounds better.”
WalletHub analysts point to several trends behind the smaller increase:
Federal Reserve rate cuts
Recent rate cuts are giving borrowers some relief. Each quarter-point reduction saves credit card users roughly $1 billion in interest over the course of a year, and multiple cuts have already taken effect.
More cautious spending habits
With many Americans already feeling stretched by existing debt, some are cutting back on expenses.
Preparing for busy holiday spending season
Kiernan said some shoppers may already have been cutting back before the holiday shopping season.
“A lot of people maybe realized they were going to have to spend a lot in the fourth quarter for various things, Christmas presents, etc.,” said Kiernan. “And so, they kind of took the third quarter to get in shape for that.”
WalletHub editors suggest considering a balance transfer.
The ideal card offers 0% interest for 21–24 months, no annual fee, and a balance-transfer fee of around 3%.
Two options WalletHub highlights:
- U.S. Bank Shield Card – 0% for 24 months
- Wells Fargo Reflect Card – 0% for 21 months
Kiernan said you can also consider a personal loan, but that won’t happen at 0% interest, so simply cutting back will help.
“Paring down their budget to only the necessities and maximizing the amount they pay on their credit card for a temporary period of time,” he said.
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