Key Points:
- Total US household debt climbed to a new high of $18.8 trillion.
- Credit card balances rose to a record $1.28 trillion.
- Delinquency rates are rising, especially for younger borrowers.
- The average credit card balance per account has remained stable.
American households are deeper in debt than ever before. According to a new report from the Federal Reserve Bank of New York, total household debt jumped by $191 billion in the last three months of 2025. This pushes the total to a new record of $18.8 trillion.
Credit card balances led the charge, hitting a new high of $1.28 trillion. Mortgages and auto loans also climbed, reaching $13.17 trillion and $1.67 trillion, respectively. This data shows that Americans are borrowing more money to keep up with the cost of living.
Worryingly, more people are falling behind on their payments. Delinquency rates are rising, with 4.8% of all debt now overdue. Young and lower-income borrowers are struggling the most. This trend highlights a “K-shaped” economy, where some people are doing well while others are falling further behind.
However, the picture is not entirely bleak. Jesse Hardin, a risk advisor at Equifax, noted that the average credit card balance per person has stayed flat. He argues that while total debt is up, individual balances have not risen faster than inflation. He also points out that delinquency rates for credit cards are still at or below the levels seen in 2024.
Experts say this debt problem is the result of a long-term affordability crisis. Howard Dvorkin, a CPA and chairman of Debt.com, explained that consumers have faced a “perfect storm” of recession, a pandemic, and inflation. The cost of housing doubled between 2018 and 2024, and new car prices doubled between 2011 and 2025. With wages not keeping up, many people have no choice but to use credit cards to cover everyday expenses.
With interest rates on credit cards now hovering over 20%, financial advisors urge people to make a plan. Options like balance transfer cards or debt consolidation loans can help reduce interest payments. For those with smaller debts, strategies like the “snowball” or “avalanche” methods can help pay down balances faster.
