Consumer debt in the United States continues to raise red flags about persistent, insistent financial stress on households. In October, consumer debt grew at a snail’s pace by just 1 percent. This trend underscores the increasing economic stress experienced by most Americans. Most have long since exhausted their pandemic savings and maxed out their credit cards. This trend is indicative of the pressure consumer spending is likely to be under in the coming months.
As it stands today, U.S. households are facing an all-time high of $18.59 trillion in total debt. Consumer borrowing has increased conservatively so far this year, indicating that many Americans are approaching their borrowing cliff. In November, consumer borrowing declined even more. This drop must be attributed to increasing consumer pressure due to lingering inflation and increasing usage of credit cards.
The trend in debt accumulation shows some troubling patterns. According to recently released consumer credit data, revolving debt—mostly consisting of credit card balances—declined by $2.1 billion in November. This drop is more than eclipsed by a larger rise in all serious delinquencies. Specifically, 3.03 percent of all households slipped into serious delinquency during Q3. This is up from 1.68 percent from this time last year.
Student loan delinquencies have increased by historic margins. In this time, jumps to serious delinquency have increased up to 14.3 percent. It’s hard to overstate just how grim the financial picture is for many. Missed or late payments have jumped 47 percent year-on-year on average for people in the prime segment.
Non-revolving debt, such as auto loans and loans for durable goods, is actually starting to hit a growth ceiling. This disturbing trend is exacerbating the economic malaise. Many consumers are finding it increasingly difficult to manage their financial obligations while spending has stagnated—adjusted for inflation—among the bottom 80 percent of income earners. The economic bottom 80 percent are left with less than a third of consumption, increasing income inequality.
The average nominal annual percentage rate (APR) on credit cards is presently 19.64 percent. Many of these lenders are now charging rates as much as 28 percent. These exorbitant high-interest rates make it even harder on the consumers who are struggling to make ends meet.
“The index has now increased for seven consecutive months, up 8.2 percent in 2025, signaling continued financial strain among American households. Legal inquiries related to bankruptcy rose sharply, while foreclosure and consumer finance issues remain elevated.” – LegalShield
The bigger effects of these trends don’t bode well for American consumers. Consumption is weakening, and household debt is at all-time highs. Millions will get stuck in a vicious cycle of economic hardship that will only increase over the next few months.