Credit card balances have risen by 15% annually as more and more people turn to credit to fill in budget gaps caused by inflationary pressures, taking on about $930 billion in debt, according to a recent report by the Federal Reserve Bank of New York.

"With prices more than 8% higher than they were a year ago, it is perhaps unsurprising that balances are increasing," researchers of the Federal Reserve Bank said in a statement. "The real test, of course, will be to follow whether these borrowers will be able to continue to make the payments on their credit cards."

There have also been other types of debt, like auto loan balances, which have gone up from $22 billion to $1.52 trillion throughout the third quarter. Mortgage balances have gone up from $282 billion $11.67 trillion, and student loan balances dramatically decreased.

"Credit-card, mortgage, and auto loan balances continued to increase in the third quarter of 2022 reflecting a combination of robust consumer demand and higher prices," Donghoon Lee, economic research advisor at the New York Fed, said. "However, new mortgage originations have slowed to pre-pandemic levels amid rising interest rates."

Just one year ago, debt from mortgage balances went up considerably, from $1 trillion to $11.7 trillion. Swiftly rising inflation costs have made it especially challenging for individuals to pay off credit card debt. As a whole, credit card balances are returning to the way that they were before the pandemic occurred.

As reported by CreditCards.com, over 60% of Americans have been in debt for more than a year. Since the Federal Reserve is increasing its target level of federal funds, yearly credit card percentage rates have been dramatically increasing.

Throughout the fourth quarter, there are anticipated to be an increase in credit card balances because of factors such as holiday shopping. Fed researchers from New York revealed that credit card balances have the tendency to go downhill.