U.S. household debt rises above $19 trillion as credit card balances hit a record $1.29 trillion

Credit card debt in the U.S. has reached a new record after climbing above $1.29 trillion in the third quarter, according to a new report.

The Federal Reserve Bank of New York noted that household debt climbed 1.8% compared to the previous quarter and balances stood above $19 trillion, up $5 trillion since the end of 2019.

The entity went on to note that volume answered to “mortgage originations” were “notably up with $595 billion newly originated in the third quarter of the year.

Aggregate delinquency rates worsened, the report noted: “As of the end of September, 5.0% of outstanding debt was in some stage of delinquency, up 0.3 percentage points from the previous quarter,” it said.

“About 135,000 consumers had a bankruptcy notation added to their credit reports in 2026Q3, a slight decrease from the previous quarter. The percentage of consumers with a third-party collection account on their credit report was steady at 4.9%,” the report added.

Another report by nonprofit credit counseling agency Money Management International showed that one in four clients had at least one unsecured debt that a lender had written off as a loss in the first nine months of 2026, up from one in five in 2020. The average balance in collections reached $11,200, up 38% over the same six-year span.

An account becomes delinquent when a borrower misses a required payment. A charge-off generally comes after an extended period of missed payments, when the lender records the balance as a loss, and the lender may still seek repayment.

MMI’s analysis covers the agency’s clients from January through September, using the same nine-month period in 2025 for its year-over-year comparisons. The charge-off figures describe people who sought help from the nonprofit.

MMI’s counseling volume rose 9.5% from a year earlier. Its clients owed an average of $40,200 in unsecured debt, up from $38,300 over the same period in 2025. That category includes credit cards and personal loans issued without collateral, such as a home or car.

“The story behind the numbers is all about the rising cost of living,” said Ted Rossman, MMI’s principal consumer finance analyst. He pointed to groceries and gasoline alongside medical bills, car repairs and home repairs as expenses that can leave households relying on credit when wages fall short.

Personal loans are showing up more often when clients first contact the agency. Through September, 46% of new clients had an unsecured personal loan, up from 42% in 2025. The share reached 48% in the third quarter, compared with 35% in 2020. The average balance on those loans rose 11.5% from a year earlier, to $19,300.

Gen Z remained the generation with the lowest average unsecured debt among MMI clients, at $20,200. Its average balance rose 10.5% from a year earlier. The number of Gen Z clients climbed 31%, the fastest increase of any generation the nonprofit tracked.