American Debt Concerns Rise as Household Balances Hit $18.78 Trillion
A latest survey from WalletHub reveals a growing sense of financial unease among Americans, with nearly half (47%) believing they are unable to take on any additional debt. This comes as total household debt reached a record $18.78 trillion at the finish of 2025, though still approximately $754 billion below the all-time high.
The Weight of Existing Debt
The average American household currently carries $155,594 in debt, according to the WalletHub report, which analyzed data from the New York Federal Reserve and the U.S. Bureau of Labor Statistics. Credit card debt alone totals around $1.23 trillion, only slightly below the peak seen in 2008.
One in three Americans anticipate their household debt will increase over the next year, signaling a continued struggle with financial stability. This apprehension is occurring despite a relatively favorable debt-to-deposits ratio of 24%, which is better than historical averages.
Skepticism Surrounds Proposed Solutions
The Trump administration recently proposed capping credit card interest rates at 10% as a potential remedy for financial strain. U.S. Treasury Secretary Scott Bessent framed the proposal as a response to recent inflationary pressures. However, the WalletHub survey indicates limited public support for this measure, with only about two in five Americans expressing approval.
Concerns center around accessibility. Thirty-seven percent of respondents stated they would not support the policy if it meant only those with “excellent” credit would qualify for the lower rate. Experts note that a 10% rate would likely be reserved for borrowers with near-perfect credit histories, excluding many who require relief.
Budgeting as a Preferred Solution
Interestingly, the survey highlights a preference for self-reliance over government intervention. A significant majority (65%) of respondents believe that improved budgeting is the most effective way to address their debt problems. This sentiment aligns with the views of analysts like Chip Lupo of WalletHub, who emphasizes the importance of fundamental financial management.
“Budgeting is the primary fundamental,” Lupo stated. “You master budgeting and all the other fundamentals that result from effective budgeting, then you’ll master your financial situations.”
Trends in Household Debt
Since 2022, credit card debt has been steadily climbing. Although overall household debt remains below its 2008 peak, the trend suggests a continued increase in financial burdens for many Americans. The average household credit card debt currently stands at $10,227, just $1,230 shy of the 2008 record.
WalletHub’s analysis adjusted for inflation to provide a more accurate comparison of debt levels over time. This adjustment is crucial, as it accounts for the changing value of money and provides a clearer picture of the true financial strain on households.
FAQ
Q: What is the current total household debt in the U.S.?
A: $18.78 trillion as of the end of 2025.
Q: What percentage of Americans feel they cannot take on more debt?
A: 47%.
Q: What is the average household debt?
A: $155,594.
Q: What do most Americans believe is the best solution to their debt problems?
A: Better budgeting.
Q: What is the proposed solution from the Trump administration?
A: A 10% cap on credit card interest rates.
Did you understand? Total household debt rose by $257 billion in 2025, an 810% increase compared to 2024.
Pro Tip: Regularly reviewing your budget and identifying areas where you can cut back can significantly reduce your debt burden.
Want to learn more about managing your finances? Explore additional resources on the Federal Reserve Bank of New York and WalletHub.
Share your thoughts! What steps are you taking to manage your debt? Leave a comment below.
