As the cost of living continues to rise, many American households are increasingly turning to credit cards and various types of loans to cover their daily expenses. Recent data reveals that approximately 24% of credit record holders across the country have debts that have entered the collections process, encompassing medical bills, student loans, auto loans, and retail installment loans. At the same time, the total household debt in the United States has surged to a record high of $19.1 trillion, with credit card debt reaching an unprecedented level of $1.29 trillion.
According to a report by CBS News, an analysis conducted by the nonpartisan Urban Institute, which examined over 10 million credit records along with data from the U.S. Census Bureau, found that around 24% of credit record holders nationwide are facing debts in collections, with a median debt of $2,913.
The situation is even more dire in communities of color, where the percentage of individuals facing collections rises to 30%, and the median debt in collections reaches $3,009.
Ted Rossman, a chief consumer finance analyst at the nonprofit debt counseling agency Money Management International, noted to CBS that since 2019, consumer prices in the United States have increased by nearly 30%. The prolonged period of high prices has led some families to deplete their savings and resort to borrowing to manage everyday expenses.
Breno Braga, a senior researcher in the Family and Financial Well-Being department at the Urban Institute, stated that the steadily rising cost of living has made it increasingly challenging for people to cover basic expenses. Furthermore, the high interest rates maintained to curb inflation have added additional strain on borrowers’ repayment obligations.
On November 10, the Federal Reserve Bank of New York released its Quarterly Report on Household Debt and Credit, which indicated that in the third quarter of 2026, the total credit card debt in the U.S. rose by $22 billion from the previous quarter, marking a 4.2% year-over-year increase and reaching a historic high of $1.285 trillion.
TransUnion, a credit rating agency, reported that the average credit card debt per borrower stands at $6,678, an increase of 2.4% from the previous year. During the same period, the number of consumers with outstanding credit card debt rose from 174.8 million to 178 million.
Data from the lending platform LendingTree shows that the average annual percentage rate (APR) for new credit card offers has approached 24%, making credit cards one of the more expensive financing options available. For consumers who cannot pay their bills in full and on time, these high interest rates can exacerbate their debt burden.
An analysis featured in the Liberty Street Economics blog, a publication of the New York Fed, highlighted that during the pandemic, credit card issuance increased among low-income community residents, resulting in lower credit scores for new cardholders. These accounts later demonstrated a higher risk of default.
Researchers from the New York Fed cautioned that against a backdrop of soaring living costs and elevated borrowing rates, some low-income families and borrowers with lower credit scores are facing heightened financial pressure.
Beyond routine consumer credit, loans related to significant expenses such as housing, automobiles, and education also contribute significantly to American households’ debt burdens.
Data from the New York Fed indicated that in the third quarter of 2026, total student loan balances increased by $5 billion from the previous quarter, reaching $1.66 trillion. Nearly 16% of student loan borrowers were reported to be delinquent, with the delinquency rate in Louisiana soaring to approximately 22%.
Furthermore, data from the Urban Institute revealed that about 3% of Americans have medical debts that have entered the collections process, with a median debt of $1,492. This statistic only includes bills from medical institutions that have not yet been collected, excluding patient expenses that have been converted into credit card debt due to payments made via credit cards.
Braga pointed out that with the increasing prevalence of High-Deductible Health Plans (HDHP), individuals might still encounter substantial out-of-pocket medical expenses, even when insured.
The Quarterly Report on Household Debt and Credit also indicated that during the third quarter, major household debt categories saw an overall increase. Specifically, auto loans grew by $21 billion, reaching $1.73 trillion; mortgage loans increased by $257 billion, totaling $13.4 trillion; and Home Equity Lines of Credit (HELOC) rose by $23 billion, with a total amount of $481 billion—marking the largest quarterly increase since 2005.
HELOC is a revolving credit line secured by home equity, allowing homeowners to borrow in chunks within their available limit.
Overall, as of the third quarter of 2026, 5.0% of outstanding household debt across the U.S. was reported in varying degrees of delinquency, an increase of 0.3 percentage points from the previous quarter. The New York Fed noted that early delinquency rates for mortgages and auto loans have worsened, whereas the rate of credit card and student loan accounts transitioning into severe delinquency has slightly improved.
This situation highlights that the pressures of debt in American households are not evenly distributed. Many low-income families and borrowers with lower credit scores are facing even greater challenges with repayment, illustrating the multifaceted nature of financial stress in today’s economy.