Red flag alert: Bad news for the economy: U.S. credit card debt is at an all-time high of over $1.23 trillion

While Trump whines on about just how fantastic everything is, about how much happier people are now than under Biden, the latest financial data out of the U.S. reveals a genuine concern: households are carrying more credit card debt than ever before.

According to a report from the Federal Reserve Bank of New York and covered by ABC News, outstanding credit‐card balances hit $1.23 trillion during the third quarter of 2025, roughly a 6% increase compared with the same quarter a year earlier. Simply put: it is not a sign of prosperity, but a flashing red warning light that has its roots in Trump’s economic decisions that make things harder for ordinary Americans.

His administration has simply fuelled a pattern of inequality and short-term growth built on cheap credit, tax breaks for the wealthy, and spiralling consumer costs.

The broader debt picture isn’t rosy either. Total household debt, which includes mortgages, auto loans, student loans and credit cards, reached about $18.59 trillion for the period from July to September, reflecting an increase of around $197 billion from the previous quarter.

While the Fed of New York analysts say that balance sheets “remain pretty strong,” they also point to clear signs of vulnerability, particularly among younger borrowers or those with thinner financial cushions. “Missed federal student loan payments that were not previously reported to credit bureaus between 2020 Q2 and 2024 Q4 are now appearing in credit reports,” the report said. “Consequently, student loan delinquency rates remained elevated after a sharp rise in the first half of 2025.”

The spike in credit‐card debt is particularly troubling because credit cards represent unsecured borrowing: there’s no collateral, unlike a mortgage or car loan. That means when financial strain hits, these debts are among the first to bite, potentially leading to delinquencies and defaults.

Trump’s economic playbook of deregulation, corporate favouritism, and fiscal recklessness has left a sliding situation that’s hard to reverse. Interest rates are now higher, housing is unaffordable for many, and credit card interest is crushing families who can’t afford to fall behind.

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