U.S. Household Debt Rises Again, Surpasses 2008 Peak

woman is holding bill and credit card in hands

U.S. household debt continues to climb to record levels. After surpassing its pre-crisis 2008 peak in the first quarter of 2017, American debt levels notched up even higher in the second, to an eye-watering $12.8 trillion. The increase was driven in part by rising mortgage debt, credit card debt, and auto loans.

Total U.S. household debt in the second quarter of $12.84 trillion represents a $522.0-billion increase from the second quarter of 2016. The proportion of debt that was delinquent was flat from the first quarter of 2017 at 4.78%. But there could be trouble ahead, as the New York Federal Reserve said the transition of credit card balances had “ticked up notably.”

The record household debt data marks the 12th consecutive quarterly increase in household debt and is not $1.7 trillion higher than it was in 2013. That said, overall debt figures are not adjusted for the growth of the population or economy. Total debt was 67% of the nominal gross domestic product in the second quarter, whereas it was 87% in 2009.

While many point to growing consumer confidence about the strength of the U.S. economy as the reason for the increase in debt, there are signs that this is not entirely the case.


Total credit card debt increased by $20.0 billion in the second quarter, hitting $784.0 billion, the highest level since the fourth quarter of 2009. Credit card delinquencies also continue to rise quarterly. This is a sign that more and more Americans are being stretched financially and need to rely on high-interest credit cards to get by.

Approximately 6.2% of credit card balances became 30 days delinquent in the second quarter, a 5.1% increase from the second quarter in 2016.

If there is a bright spot, it’s that the number of delinquencies are still below 13%, which is where it was at during the financial crisis. However, that’s little consolation to those that are delinquent.

The number of credit cards becoming 90 days delinquent is also on the rise. This is another worrying sign that American borrowers are becoming distressed.

Auto loan debt also increased in the second quarter with the origination of $148.0 billion of new auto loans. Another worrying sign: $51.0 billion of loans went to borrowers with credit scores below 660. That’s subprime to you and me. Both figures are teetering near the highest levels in 10 years. Overall, the total volume of loans is now at a record $1.19 trillion.

Americans may be purchasing because they’re optimistic, but they’re borrowing on the hope they can eventually pay for the silver lining.


Quarterly Report on Household Debt and Credit,” Federal Reserve Bank of New York, August 14, 2017.