Household debt hits record $18 trillion as families lean on credit cards

(InvestigateTV) — Total household debt in the United States hit a record $18 trillion in the first quarter of this year, according to the New York Federal Reserve, as more families lean on credit cards to cover rising costs.

Ted Rossman with Money Management International said demand for credit counseling has grown substantially. Enrollment in the organization’s debt management plans has reached a 10-year high, and financial counseling sessions are up 143% since early 2021.

Rossman said much of the pressure traces back to rising prices across nearly every category of spending.

“People are paying more for everything,” Rossman said. “There was the U.S. Bureau of Labor Statistics report recently that food prices are up 33% since 2019. You could say similar things about cars, gas, medical care, housing, childcare — all these things are up 30, 40, 50% from pre-pandemic levels.”

That pressure is forcing many families to rely on credit cards, drain savings and make difficult decisions about which bills to prioritize, Rossman said.

Rossman said shame often keeps people from seeking help.

“Let’s take the stigma out of it. A lot of times people are very ashamed about credit card debt. They don’t want to talk about it,” Rossman said. “One of the biggest questions our counselors get is, ‘Am I the worst example you’ve ever seen?’ People are very ashamed about talking about it. We should try to set that aside — millions of people are in the same boat. Half of credit card holders carry debt from month to month.”

Rossman said the average client at Money Management International arrives with about $40,000 in unsecured debt. That debt typically does not come from luxury spending, but from everyday expenses like car repairs, medical bills and groceries.

Smaller balances can sometimes be addressed with zero-percent balance transfer offers, but for larger amounts of debt, nonprofit credit counselors and formal debt management plans may offer a more effective path forward.