Summary
Many Americans are falling behind on debt payments, with total household debt reaching $18.6 trillion in 2025. Large numbers of defaults on credit cards, auto loans, and student loans highlight financial difficulties driven by high inflation and interest rates. This situation may challenge economic growth as people cut back on spending.
Key Facts
- Total household debt in the U.S. hit a record $18.6 trillion in the third quarter of 2025.
- Credit card debt increased by $24 billion, with serious delinquency rates at 7.1%.
- Auto loans have a delinquency rate of 3%, leading to 2.2 million vehicle repossessions so far in 2025.
- 5.5 million student borrowers are in default, and another 3.7 million are over 270 days delinquent.
- The high levels of debt and defaults are compared to the period before the Great Recession.
- High inflation and interest rates are identified as key reasons for the financial stress.
- Rising defaults may slow down economic growth as people cut back on spending.
- Some experts note that while debt issues are severe, not all signs point to an immediate crisis, as write-off rates are not extremely high.
