American total household debt hit a record $18.04 trillion in the last quarter of 2024, propelled by a rise in credit card debt and auto loan balances, according to a new report released by the New York Federal Reserve on Thursday.
This increase in American debt – up $93 billion from the third quarter of 2024 – signals the persistent impact of rising inflation on household budgets. This impact was confirmed by a 0.5 percent increase in the Consumer Price Index (CPI) for January 2025 released Wednesday, which brought the total increase in CPI to 3 percent over the last 12 months.
Auto loans in particular, where American debt now totals $1.7 trillion, accounted for a substantial share of the household debt increase reported by the New York Fed. Outstanding auto loan balances increased by $11 billion over the third quarter of 2024. Delinquency rates of auto loans are also rising as more Americans struggle to keep up in the current inflationary environment.
Federal Reserve researchers highlighted high vehicle prices—an effect of the global pandemic—as a reason why so many American borrowers have fallen behind on their auto loan payments. Unlike mortgages, researchers say, auto loan payments impact a uniquely wide band of American consumers.
“Nearly all borrower groups have seen delinquency rates rise beyond their pre-pandemic levels,” New York Federal Reserve analysts reported.
The report from the New York Federal Reserve also indicated a specific spike in auto loan debt among Americans aged 18-29. A sharp rise in auto loan delinquencies continues to impact those in lower income brackets, where young Americans are most likely to fall.
“For auto loans, higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers,” New York Federal Reserve analysts reported in a February 2025 blog post.
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