CITIZENS NEWS

Americans feeling the strain as household debt and credit card obligations hit new highs

By ramontomeydw // 2025-11-07

• U.S. household debt surged to an unprecedented $18.59 trillion in Q3 2025, driven by mortgages, credit card debt and economic instability.
• Credit card balances meanwhile soared to $1.32 trillion – fueled by job losses, inflation and reliance on credit for basic expenses.
• Despite claims of "solid" household balance sheets, lower and middle-class families face severe financial stress, with many trapped in a cycle of debt due to stagnant wages and rising costs.
• The Fed's low-interest-rate policies encouraged borrowing, but tightening monetary policy now threatens to increase debt servicing costs, deepening financial instability.
• Solutions like debt relief programs, financial education and responsible lending reforms are critical to breaking the debt cycle and preventing a full-blown credit crisis.

Americans are grappling with an unprecedented surge in both household debt and credit card obligations, with this rising tide of debt raising serious concerns about the financial well-being of American households and the potential for a credit crunch. A report by the Epoch Times on Wednesday, Nov. 5, revealed this dire situation. The outlet, citing the Federal Reserve Bank of New York, noted that total debt reached a fresh record high of $18.59 trillion in the third quarter of 2025. Credit card debt, a significant contributor to the overall household debt surge, has been climbing steadily. In September of this year, finance website WalletHub pointed out that credit card obligations rose by $28 billion during the second quarter of 2025 – increasing the total credit card debt to a staggering $1.32 trillion. The average American household with debt owes $9,990 on their credit cards, a figure that has been growing at an alarming rate. This increase in credit card debt can be attributed to various factors, including the Wuhan coronavirus (COVID-19) pandemic that led to job losses and economic uncertainty – forcing many Americans to rely on credit cards to make ends meet. Michael J. Panzner, in his 2007 book "Financial Armageddon," noted that "those struggling on the lowest rungs of the ladder would almost certainly bear the brunt of the early economic carnage. With an average of $3,800 in the bank, $2,200 in credit card debt, a $95,000 mortgage securing a $160,000 home and household earnings of approximately $43,000, the typical American family won't have a lot of room to maneuver."

The debt trap: How Americans are surviving on credit

Despite the concerns of a K-shaped economic recovery where the wealthy continue to prosper while the lower and middle classes struggle, household balance sheets remain solid, according to one market analyst. However, this assessment may not reflect the true financial strain experienced by many Americans, who are increasingly turning to credit cards to bridge the gap between their income and expenses. The rising tide of household debt has far-reaching implications for American families. High levels of debt can limit financial flexibility, making it difficult for households to weather economic storms or invest in their future. Moreover, the high cost of servicing debt can divert funds away from essential expenses, such as healthcare and education, further exacerbating the financial strain on American families. The Federal Reserve's low-interest rate policy, implemented in response to the COVID-19 pandemic, has contributed to the surge in household debt. Low-interest rates make borrowing cheaper, encouraging Americans to take on more debt. However, as the Fed begins to tighten monetary policy, the cost of servicing debt is likely to increase, further exacerbating the financial burden on American households. Americans are drowning in record-high household and credit card debt, fueled by economic instability, predatory financial systems and failed government policies – forcing families into a cycle of dependency on credit just to survive. To address the household debt crisis, policymakers must take decisive action to support American families and promote sustainable economic growth. This may include targeted interventions to help households manage their debt, such as debt relief programs or financial education initiatives. Additionally, policymakers should consider reforms to the financial system that promote responsible lending and borrowing practices, helping to break the cycle of debt that is ensnaring so many American families. Watch this video about an impending debt crisis. This video is from the Alt Invest Media channel on Brighteon.com. Sources include: TheEpochTimes.com 1 TheEpochTimes.com 2 Brighteon.com

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