Americans Owe More Money Than Ever -- and Many Are Falling Behind on Payments

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • Total consumer debt has reached its highest level ever, hitting $16.9 trillion in the fourth quarter of 2022.
  • Those who are delinquent on their debts ticked up as well, for credit cards, auto loans, and mortgages.
  • Nearly 1 out of 3 (32%) Americans have paid a bill late in the past six months.

The growing debt crisis in America is due to multiple factors.

It's no secret that Americans owe more money than ever before. According to the Federal Reserve, total consumer debt has reached its highest level ever, hitting $16.9 trillion in the fourth quarter of 2022. And while some consumers are able to pay off their debts on time and in full, many are falling behind on payments. Amid high inflation, stagnant wages, and other factors, 32% of Americans say they are struggling to pay their bills.

Total debt reaches all-time highs

In the final quarter of 2022, household debt surged by $394 billion, amounting to a staggering $16.9 trillion, as reported in the latest Quarterly Report on Household Debt and Credit. The increase included credit card balances soaring by $61 billion, reaching a new high of $986 billion, surpassing pre-pandemic levels.

Additionally, mortgage balances swelled to $11.92 trillion and auto loans climbed to $1.55 trillion. The Fed’s latest report also found that the delinquency of virtually every loan type increased. The percentage of seriously delinquent loans, past 90 days, have grown significantly, with the delinquency rate for credit card borrowers surpassing pre-pandemic norms.

Rising costs of living

The cost of living has skyrocketed in the wake of the pandemic, but most Americans' wages have not kept pace with inflation. This means that many people are unable to make ends meet without relying on credit cards or taking out loans -- which can quickly lead to overwhelming debt levels if not managed carefully. To make matters worse, high interest rates mean that even small amounts of debt can quickly become unmanageable if left unpaid for too long.

Our Picks for the Best High-Yield Savings Accounts of 2024

Rate info Circle with letter I in it. 4.25% annual percentage yield as of July 24, 2024
Min. to earn
Rate info Circle with letter I in it. 5.31% annual percentage yield (APY) is accurate as of 7/11/2024 and subject to change at the Bank’s discretion. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.
Min. to earn
$500 to open, $0.01 for max APY
Rate info Circle with letter I in it. To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.
Min. to earn

According to a recent study by LendingTree, 1 out of 3 (32%) Americans have paid a bill late in the past six months and 3 out of 5 (61%) say it’s because they didn’t have enough money to cover the costs. This number has increased dramatically, with 40% of Americans saying they are less able to afford their bills than a year ago.

Stagnant wages

Wages have been stagnant since the early 1970s, making it harder for people to keep up with their debt payments. While some companies have increased wages recently in response to a tighter labor market, many workers still find themselves struggling to make ends meet each month. While wages have grown since the start of COVID-19, they have not grown as much as in the past. Unfortunately, this wage stagnation has led many people into a cycle of debt that is difficult to escape from.

What to do if you are behind on payments

Dealing with being behind on loan or credit card payments can be stressful and complicated. The best way to handle the situation is to contact your lender as soon as possible. It may be able to work out a payment plan that is tailored to your individual needs. It's important to note that lenders may even reduce or waive late fees in special cases, so it doesn't hurt to find out what options are available to you. The worst thing you can do is ignore the problem.

Additionally, taking advantage of financial counseling services or debt management programs can help you create a budget and make good on repayments over time. With a bit of extra effort today, you can get back on track with your payments, preserving your credit score and future borrowing possibilities down the line.

The growing debt crisis in America is hitting younger borrowers hard. Despite the fact that overall debt delinquency is below pre-pandemic levels, the number of people who have transitioned into delinquency has accelerated rapidly. Rising costs of living, stagnant wages, and higher interest rates are all contributing factors for why many are falling behind on their debt payments.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow