Consumers’ household debts continue to rise, according to the latest Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York. The report shows total household debt increased by $191 billion in the fourth quarter of 2025, totaling a new high of $18.8 trillion.
Credit card balances in particular rose by $44 billion during the fourth quarter of 2025, and consumers now owe a total of $1.28 trillion, up 5.5% from the previous year.
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In a call with reporters Tuesday, New York Fed researchers noted that the current increase in credit card debt can be attributed to seasonality, as consumers put holiday expenses on their credit cards.
The Fed confirmed this in May with the release of its quarterly report, showing balances decreased after a seasonal spike.
When it comes to delinquencies, rates worsened slightly in the fourth quarter. Additionally, serious delinquencies jumped from 1.7% to 3.26% year over year, with the biggest contributor being student loans.
As of the end of December 2025, 4.8% of outstanding debt was in some stage of delinquency. The Fed noted transitions into serious delinquency ticked up for home equity lines of credit, mortgages and student loans while auto loans and credit cards decreased slightly.
This data is consistent with evidence of a K-shaped economy, with researchers saying that delinquency rates are rising among “younger, low-income consumers.” So while high-earning consumers contribute to the economy with robust buying power, lower-income consumers are struggling to make ends meet. According to a separate report released Monday by digital personal finance company Achieve, the majority of Americans are having to choose between keeping up with debt payments and covering everyday expenses.
Over half of consumers (51%) said they “resorted to one or more risky financial stopgaps” in the past three months after falling short on what they already owed. These actions included reduced spending on basic needs, increased credit card debt, and pulled funds from emergency or short-term savings.
“This is what the K-shaped economy looks like in the real world,” Achieve co-founder and co-CEO Andrew Housser says in an email. “There’s an affluent half of the population whose financial lives aren’t disrupted by momentary inconveniences. But for everyone else, financial triage and trade-offs are a way of life.”
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Household Debt at New High, According to Latest Fed Report originally appeared on usnews.com
Update 05/12/26: This story was previously published at an earlier date and has been updated with new information.
