The Bills Driving U.S. Household Debt to New Peaks — Can You Shrink Yours?
Written by
Vance Cariaga
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Brendan McGinley
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Household debt continues to hit new highs in the United States across all types of loan categories, with credit card and student loan debt showing some of the biggest gains.
Here are the best ways to tackle the two biggest forms of U.S. household debt.
How U.S. Households’ Debt Has Risen
Total household debt climbed to a record $18.59 trillion during the 2025 third quarter, according to new report from the Federal Reserve Bank of New York. That was up from $17.94 trillion the previous year and $18.39 the previous quarter. Mortgage balances account for most the total, rising by $137 billion to $13.07 trillion during the quarter. Credit card balances increased by $24 billion and now total $1.23 trillion outstanding, the New York Fed reported. Those balances are 5.75% above the level a year earlier.
According to the Federal Reserve, student loan balances rose by $15 billion and ended Q3 at $1.65 trillion. Delinquency rates have “sharply increased” as well, Entrepreneur reported, with 9.4% of all student loan balances now considered 90 days delinquent or more — up from 7.8% in the first quarter.
If you find yourself deep in credit card and/or student loan debt, here are some ways to bring it back under control.
Credit Card Debt
The best way to lower debt from credit cards is to stop using them. But if that’s not an option, aim to pay balances in full each month to avoid interest charges. At the very least, you should pay more than the minimum every month.
Here are some other steps to take, according to separate blogs from Equifax and Baird Wealth:
Revise Your Budget
Make it a priority to find areas you can cut back on to free up more money for credit card payments. Focus first on discretionary expenses you can either reduce or eliminate altogether, such as dining out, and put the money you save toward your debt.
Snowball Payment Method
With this method, you pay the minimum on all credit card bills except the one with the smallest balance. The idea is to focus on paying off one card at a time until all are paid off.
Avalanche Method
This is similar to the snowball method except that you pay off the highest-interest cards first, which lets you save money in interest payments.
Consolidate Your Debt
Debt consolidation can simplify the process of paying off your cards and also help you save money on lower interest payments. There are several options, including moving all your debt into a single low-interest card, getting a low-interest debt consolidation loan or applying for a home equity loan.
Student Loan Debt
If you want to pay down your student loan debt faster, here are some tips provided by Federal Student Aid.
Enroll in Automatic Debit
Having your student loan payment automatically deducted from your bank account each month ensures that you never miss a payment. You might also get a lower interest rate, depending on the loan servicer.
Pay More Than the Minimum
Making more than the minimum payment has a few benefits. It can reduce the interest you pay, lower the overall cost of the loan and help you pay off your debt faster. Just make sure your loan servicer allows the extra money to go toward your higher interest loans first.
Use Your Tax Refund To Pay Down the Loan
This is a good way to get ahead of your student debt and pay it off faster. The same theory applies to any kind of sudden financial boost, such as work bonuses or inheritances.
Research Loan Forgiveness Options
There are multiple approaches to obtaining forgiveness for your federal student loan balance, according to Federal Student Aid. One option is the Public Service Loan Forgiveness program available to teachers, government employees, nonprofit employees, medical professionals and others.
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