#United States #Atlanta #economic trends #Equifax #Consumer Debt

U.S. Consumer Debt on the Rise

Recent findings from Equifax, the renowned consumer credit agency, reveal a troubling trend regarding U.S. consumer debt, which reached an alarming total of $18.20 trillion by the end of December 2025. This represents a sharp increase from both the previous year and the preceding months of 2023 and 2024. Despite a slight easing in delinquency rates for various lending products, many consumers continue to face significant financial strain amid an evolving economic landscape characterized by a K-shaped recovery.

Growth of Consumer Debt

According to Equifax's Market Pulse Fourth Quarter U.S. Consumer Credit Trends, between late 2024 and the end of 2025, total consumer debt increased by 3.7%. Notably, while still seeing high levels of credit card use, the average subprime credit card utilization remained stable at 75.6%. This plateau occurred against a backdrop of increasing prices, higher interest rates, and rising delinquencies. Maria Urtubey, a Market Pulse Advisor for Equifax, emphasizes that the apparent improvements in some areas may be misleading, as they mask the financial difficulties experienced by lower-income consumers.

The K-Shaped Economic Divide

The findings highlight a persistent economic divide as affluent consumers benefit from enhanced credit access, while many individuals in lower-income brackets find themselves under pressure. Urtubey points out that the financial outcomes reveal divergent experiences among different socioeconomic groups. This illustrates the need for a comprehensive assessment of the broader economic conditions when considering the financial well-being of American households.

Delinquency Rates and Trends

Although delinquency rates have shown signs of easing—from a peak of 6.8% in Q3 to 5.7% in December 2025—these figures still remain elevated when compared to norms prior to the pandemic. A critical aspect of this issue remains the constant economic pressures, including infrastructure challenges driven by inflation and a slower job market, which have contributed to the overall persistence of stressed financial conditions.

Equifax predicts that as tax refund season approaches, credit performance may improve temporarily, as individuals often use these funds to reduce their debt levels during this period of the year.

Insights on Various Debt Types

• - Bankcard Balances: Total bankcard balances rose to $1.12 trillion, a 4.1% increase year-over-year, while delinquency rates for this segment decreased slightly to 3.03%. Consumers seem to rely increasingly on revolving credit, although average utilization edged down to 21.2%.
• - Auto Credit Market: In the auto loan sector, balances reached $1.685 trillion, reflecting a modest gain of 1% from the previous year. While delinquency remains stable, leasing activity has surged, indicating a shift toward more affordable options among consumers faced with rising vehicle prices.
• - Student Loans: The student loan market also witnessed changes, with outstanding balances at $1.33 trillion, down 1.4% from the previous year. However, severe delinquency rates climbed, signaling potential future obstacles as the restart of wage garnishments could alter repayment dynamics.

Conclusion

As Equifax continues to track U.S. consumer credit trends, this report serves as a crucial reminder of the complex and often challenging financial landscape that characterizes American consumers today. While some segments of the population are navigating their current financial commitments with relative ease, many others are grappling with the reality of an uneven recovery that necessitates balanced approaches to financial planning and sustainable credit use.

Equifax has monitored consumer credit trends in the U.S. for over two decades, providing critical insights into market dynamics that extend beyond mere figures to reveal the underlying economic realities facing American households.