Americans are leaning on plastic and car loans as more slip behind on payments.
At a Glance
- Credit-card balances hit about $1.28 trillion as serious delinquencies rose.
- Auto debt climbed to about $1.67 trillion with elevated delinquency across debts.
- Nearly 1 in 5 households paid a debt late in 2025, up from 1 in 8 in 2022.
- Financial planners link the stress to higher prices squeezing family budgets.
Household debt rose as more borrowers fell behind.
The Federal Reserve Bank of New York reported total household debt at $18.8 trillion at the end of 2025, up 1% in the quarter. Credit-card balances reached about $1.28 trillion, up $44 billion in three months and 5.5% over the year. The same report also showed more credit card accounts moving into serious delinquency. Auto-loan balances rose to about $1.67 trillion, a record scale. Across all household debts, 4.8% were in some stage of delinquency.
CBS News reported a clear shift at the kitchen-table level. About 20% of households were late on a debt payment in 2025, up from about 12% in 2022. A certified financial planner told CBS that inflation has strained budgets, pushing more people to rely on cards and fall behind. The pattern lines up with the New York Fed data: balances climbed, and delinquency measures worsened at the same time, especially for revolving credit.
Credit cards signal stress sooner than other loans.s
Credit cards act like a pressure valve. When groceries, rent, and gas cost more, families swipe now and hope to catch up later. The New York Fed’s data shows that more cardholders shifted into serious delinquency in late 2025, even as total balances grew. That mix often appears when paychecks lag living costs and interest rates amplify the pain. The effect hits younger and lower-income borrowers first because they have less savings and face higher card rates.
Auto loans tell a related, but not identical, story. Balances climbed as vehicle prices and loan sizes stayed high. The New York Fed reported a slight dip in auto-loan transitions into serious delinquency in the quarter, yet overall household delinquency still worsened. That shows category differences matter. Families often prioritize car payments to keep a job. They may let a credit card go late before risking a repossession. But sustained high payments can still catch up.
Why inflation joins a stack of other drivers
Inflation reduces purchasing power and leaves less cash for debt service. That alone can explain some of the late payments. Yet the data also reflect higher interest costs, bigger loan sizes, and the end of certain pandemic-era shields. Federal Reserve researchers found that card and auto delinquencies climbed from historic lows to levels not seen since the Great Financial Crisis, then eased slightly into 2025. That history suggests several forces moved together, not a single cause.
For households, labels matter less than math. The average car payment rose as loan amounts swelled, while credit-card interest charges ate more of each check. When food, insurance, and rent rise, people juggle bills. Many choose to protect the home and the car first. That leaves credit cards as the shock absorber and the first warning light. The New York Fed’s late-2025 reading shows that warning light flashing brighter on cards, even as auto stress stayed high.
What to watch next
Category-specific delinquency will tell the next chapter. If credit-card serious delinquencies keep rising while auto stress holds flat, households may be triaging debt to keep work and shelter stable. If auto delinquencies re-accelerate, that would point to payment levels that even prioritization cannot fix. Any drop in inflation helps, but relief also depends on income growth and interest-rate paths. Personal responsibility and living within means remain essential, yet policy should avoid fueling price spikes that erode paychecks.
