The plastic is piling up. Americans now hold $1.166 trillion of credit card debt, which, according to Lending Tree, is “is the highest balance since the New York Fed began tracking in 1999.” That’s on top of the $1.64 trillion in outstanding auto loan balance. Together, “elevated balance levels continue to reveal stress for many households,” according to the Federal Reserve Bank of New York.
A survey from Bankrate shows 20% of Americans have maxed-out their credit cards and another 17% have come close to doing so. Bankrate noted that maxed-out cards can have negative consequences for consumers. “Their available credit dries up, limiting their options if they need to cover a necessary expense in a pinch, such as unexpected medical or household expenses.”
One generation accumulating a lot of debt is Gen Z. According to Business Insider, the average Gen Z consumer has a $2,834, “a 26% increase from the average figure for millennials who were the same age a decade ago.” Business Insider also noted that Gen Z’s use of credit cards matches their comfortability with technology. “The digital natives have more payment options than any generation before them, and they’ve embraced electronic payments and alternative credit methods like digital wallets and buy-now-pay-later apps.”
Financial expert Peter Grandich is concerned about the rising levels of credit card debt. “25 percent of the overall workforce is using credit cards for daily necessities…that’s why you’re seeing delinquencies,” he told Drew Mariani.
The increase in underwater car loans also poses another concerning economic challenge for consumers. According to Edmunds, “24.2% of trade-ins toward new vehicle purchases had negative equity, up from 23.9% in Q2 2024 and 18.5% in Q3 2023.” Furthermore, Edmunds reported
that of those consumers with negative equity, 20% of them “owe more than $10,000 on their auto loans.” Heritage Foundation economist EJ Antoni told Drew Mariani that some consumers are “paying more for their car loans than they are for their rent.” Antoni considers this phenomenon an unsustainable bubble. “There are a lot of what I would call ticking time bombs in this economy that are all set to start going off next year,” Antoni said.
