US household debt soars to record $18.6 trillion — is a financial crunch coming?

Americans now owe a total of $18.59 trillion in household debt, according to new data released Wednesday by the Federal Reserve Bank of New York. Debt increased by $197 billion from July through September 2025, compared to the previous quarter.

On X, Barchart posted, “U.S. Household Debt jumps to new all-time high of $18.59 Trillion Congrats everyone, we did it.” Since the end of 2019, household debt has gone up by $4.4 trillion. Experts from the New York Fed said “overall household balance sheets do remain pretty strong,” though they noticed some signs of weakness among younger borrowers, as stated in the report by Yahoo Finance.

Student loan debt hits record high

Americans now owe $1.65 trillion in student loans — the highest ever, as per the report by Yahoo Finance. Nearly 10% of all student debt is now 90 days or more delinquent, meaning borrowers are late or not paying at all.


The report said, “Missed federal student loan payments that were not previously reported to credit bureaus between 2020 Q2 and 2024 Q4 are now appearing in credit reports”, as mentioned by Yahoo Finance. Because of these updates, student loan delinquency rates stayed high even after a sharp rise in the first half of 2025.

Researchers said that measuring student loan delinquencies is “complicated” since payments were paused for four years during the pandemic. Ted Rossman, a senior industry analyst at Bankrate, said, “Student loan delinquencies are at a record high, but auto loan and credit card delinquencies aren't as high as they were in the middle of 2024.”

Credit card and auto loan debt stay high

Outstanding credit card balances rose by $24 billion in the third quarter, reaching $1.23 trillion — the highest ever. Compared to one year ago, credit card debt has grown by nearly 6%. Auto loan balances stayed steady at $1.66 trillion this quarter.

As stated by Yahoo Finance, Rossman added, “While there is some distress at the household level – in line with that K-shaped economy where the rich get richer and the poor get poorer – the macro picture is fairly bright.”

FAQs

Q1. Why is U.S. household debt at a record high in 2025?

U.S. household debt hit $18.6 trillion because of rising student loans, higher credit card use, and increased living costs, according to the Federal Reserve Bank of New York.

Q2. Which type of debt is rising the fastest?

Student loan debt is growing the fastest, reaching a record $1.65 trillion with more borrowers missing payments.