Credit card debt hits $1.28T as rewards influencers lure borrowers

American credit card balances reached $1.277 trillion in the fourth quarter of 2025, the highest since the New York Fed started tracking the data in 1999. The average cardholder now carries between $6,500 and $6,800 in revolving debt, well above pre-pandemic levels. Average APRs have climbed past 21%, and a growing number of Americans face rates above 30%, according to Bankrate’s 2026 survey.

A parallel trend has amplified the cycle: the credit card influencer economy. Social media creators earn commissions when viewers apply for cards through affiliate links. The content typically shows metal cards, airport lounges, and lie-flat seats, with the implied promise that the perks alone justify the annual fee. What the videos rarely show is the effort required to track rotating bonus categories, compare portal prices, and calculate whether benefits exceed a $695 fee.

Nick Ewen, editor-in-chief of The Points Guy, holds 28 active credit cards and audits every one when the annual fee posts. His wife carries a handwritten cheat sheet of which authorized-user card to use for which purchase category, updated every three months. “I have never once paid a cent of credit card interest,” he said. “If you are carrying a balance month to month, you should not be in this game.”

Richard Kerr, GM of travel at Bilt and a veteran of the points-and-miles space, said most people who ask for a travel card recommendation end up getting something else. “I would say 90% of people who ask me what travel card to get, I end up not recommending a travel card for them,” he said. He advises most consumers to get a no-annual-fee card with a flat 2% cash back on everything, “never a wrong way to go,” he said.

The influencer incentive structure compounds the problem, said Matt Schulz, chief consumer finance analyst at LendingTree. “I don’t think a lot of influencers do a good enough job explaining how hard managing points and miles actually is,” he told Fortune. “And I completely understand why they don’t, because it’s in their own interest not to.”

Schulz noted that the sign-up bonus is actually a spending requirement: “Spend $5,000 in three months and then get the bonus.” At 25% APRs, carrying a balance after that spend quickly outweighs the perks. He also pointed out that most luxury travel content is funded by business expenses run through a card, not personal spending. “That’s how a lot of big influencers afford all of this. They’re putting all of their business expenses on credit cards and turning it into first class on Emirates to Dubai.”

The dynamic creates a two-tier system within the credit card industry. Issuers earn high interest income from the roughly 47% of cardholders who carry a balance month to month, and they use that revenue to fund rewards for the minority who pay in full. As Fortune reported in January, credit card companies are taking larger interest payments from those who carry a balance and redistributing them as rewards to people who don’t.

For the largest issuers. American Express, JPMorgan Chase, Capital One, and Discover, the rising debt and APR environment boosts net interest income as long as consumers keep paying. But the risk of charge-offs is mounting. The New York Fed’s data shows total credit card debt at a record, and delinquencies have been trending higher. Synchrony Financial, which specializes in store-branded cards and has a higher exposure to subprime borrowers, faces a more direct hit if defaults accelerate.

The influencer economy adds a layer of acquisition cost that may not convert into profitable customers. Affiliates earn commissions on new accounts, but if those accounts carry balances and eventually default, the issuer’s lifetime value calculation turns negative. Schulz said the sign-up bonus structure itself can push consumers “over their skis.”

China last year passed a law requiring content creators discussing medicine, health, law, finance, or education to prove verified professional credentials before posting. No similar regulation exists in the U.S., but the trend has drawn attention from consumer advocates.

Ewen, Kerr, and Schulz all arrive at the same recommendation for most consumers: a no-annual-fee card with a flat 2% cash back on everything. “Never a wrong way to go,” Kerr said.