American Household Debt at Record Levels, However Americans Continue to Spend

Household debt continues to rise as Americans keep spending. Increases in the cost of living have outpaced salary growth, while elevated interest rates have added to the strain.

The elimination of Biden-era benefits and loan forgiveness programs has also weighed heavily on many households that had grown accustomed to government relief and easy credit.

Total U.S. household debt reached a record $18.59 trillion in Q3 2025, an increase of $197 billion from the previous quarter. Household debt is distributed across several categories, with mortgages making up the largest share.

Mortgage balances rose by $137 billion to $13.07 trillion, while credit card balances climbed by $24 billion to $1.23 trillion, an all-time high, nearly 6% higher than a year earlier.

Student loan debt also reached a record $1.65 trillion, while auto loan balances remained steady at $1.66 trillion.

By category, total household debt includes $13.07 trillion in mortgages, $1.66 trillion in auto loans, $1.65 trillion in student loans, $1.23 trillion in credit card debt, $0.55 trillion in other debt, and $0.42 trillion in home equity lines of credit (HELOCs).

While the debt itself is problematic, a more worrying economic indicator is the rise in delinquencies.

About 4.3% of total debt is now more than 30 days past due, the highest level since early 2020 but still well below the 11% recorded during the 2009 financial crisis.

Nearly 10% of all student debt has been reported as 90 days or more delinquent, marking a record high for student loan delinquencies.

Liberal Democrat policies are partially to blame, as the spike stems in part from missed federal student loan payments that were not reported to credit bureaus between Q2 2020 and Q4 2024, which are now appearing in credit reports following the end of the pandemic payment pause.

Currently, 7.7% of aggregate student debt was reported as 90 or more days delinquent, compared to less than 1% in Q4 2024.

Only about 35% of student loan borrowers are currently in active repayment, with delinquency levels significantly elevated and repayment rates far below pre-pandemic levels. When student loan payments were paused, many borrowers took on additional credit and are now facing a financial reckoning as repayments resume, compounded by the broader effects of a higher cost of living.

The cumulative inflation that occurred during the Biden administration exceeded 20%.

Although inflation under the Trump administration has since cooled to around 3%, closer to the Federal Reserve’s 2% target, prices have not declined, and wages have failed to keep pace with the elevated cost of goods and services.

Additionally, interest rates remain elevated, further increasing total debt burdens.

The average credit card interest rate reached 24.35% in August 2025, making it extremely costly for consumers to carry balances.

Mortgage rates, which doubled during the pandemic, are now hovering around 7%, putting further strain on household budgets.

More critically, certain essential costs have far outpaced general inflation. Home prices have risen by more than 40% since 2018, while wages have increased by only 28% over the same period.

The median U.S. asking rent has climbed by roughly 22%, adding pressure to already stretched family finances.

Education costs have also surged, driven by excessive federal grants and loans, as well as the expectation under the Biden administration that student loan debts would eventually be forgiven.

The easy availability of government-backed funding made students less price-sensitive, further fueling tuition hikes. Since 1980, college tuition and fees have increased by an astonishing 1,200%, while the Consumer Price Index for all items has risen only 236%.

Across age groups and income levels, spending and debt patterns in the United States vary sharply. Debt typically peaks between ages 30 and 59, the years when most Americans are working full-time, raising families, and carrying mortgages.

Total and per-capita debt by age group are as follows: ages 18–29, $1.05 trillion ($19,962 per person); 30–39, $3.89 trillion ($84,565); 40–49, $4.76 trillion ($111,148); 50–59, $4.02 trillion ($97,336); 60–69, $2.73 trillion ($67,574); and 70 and older, $1.73 trillion ($43,142).

Older Americans tend to have broader access to credit, with 91% of those aged 60 and above owning at least one credit card, while more than half of adults aged 30 to 59 carry revolving balances.

The data suggest that the U.S. economy is increasingly developing a K-shaped pattern: higher-income households continue spending and borrowing comfortably, while lower-income and younger borrowers are struggling to keep up.

The share of subprime borrowers has risen to levels not seen since 2019, even as the number of super-prime borrowers, those with very strong credit, has also increased.

The average credit card debt per borrower now stands at roughly $6,523, with about 175 million consumers carrying balances.

Federal Reserve Chair Jerome Powell noted that while “consumers at the lower end are struggling,” there is clear evidence that “people are spending” at the higher end.

Younger generations are feeling the brunt of rising costs. Millennials and Gen Z spend a far larger share of their income on housing than older generations.

Millennials devote 21.6% of their income to housing, more than Gen X or baby boomers, leaving less for savings and discretionary spending.

Gen Z renters will spend about $145,000 on rent by age 30, 14% more than the $127,000 spent by millennials at the same age. A majority of Gen Z and millennial renters, around 70%, say they struggle to afford their monthly housing payments.

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