By JBizNews Desk

NEW YORK — Americans are carrying more debt than ever before, and a growing share of that borrowing is coming from households already under financial strain, according to a new Equifax Market Pulse Report released Thursday.

Total U.S. consumer debt reached a record $18.9 trillion through March 2026, up from a year earlier and marking another milestone in the steady expansion of household borrowing. While rising debt balances have become a familiar feature of the post-pandemic economy, Equifax’s latest data points to a deeper trend: lower-income consumers are increasingly relying on credit cards to pay for necessities rather than discretionary spending.

Credit-card balances, which Equifax classifies as bankcard debt, climbed to $1.085 trillion, up 3.9% from a year earlier and outpacing inflation. More striking was where the growth occurred. New credit-card accounts increased 8.1% overall, but applications approved for subprime borrowers — consumers with the lowest credit scores — surged 18.6%. At the same time, lenders expanded available credit to those borrowers, increasing credit limits by 37.6% year over year.

Maria Urtubey, an advisor at Equifax, said the numbers suggest a growing divide within the U.S. economy.

For many households, borrowing is no longer funding vacations, electronics, or discretionary purchases. Instead, credit cards are increasingly being used to cover recurring expenses such as groceries, rent, utilities, and transportation costs. Economists often refer to this phenomenon as “survival debt” — borrowing used to bridge the gap between wages and everyday living expenses.

The report reinforces what many economists describe as a K-shaped economy, where higher-income households continue to benefit from asset appreciation, strong employment, and investment gains, while lower-income consumers struggle to keep pace with rising costs.

The same dynamic appears in higher education financing. Although the number of new student loans declined by more than 10% over the year through January, the total dollar amount borrowed increased 4.7%, indicating that the cost of obtaining a degree continues to rise even as fewer students take on educational debt.

Student loans are also showing some of the most visible signs of financial stress. Equifax reported that 17.01% of student loans were at least 90 days delinquent in March, marking the fourth consecutive monthly increase. While still below the peak reached in 2025, the trend has raised concerns as federal student-loan collection efforts resume.

Historically, borrowers have prioritized mortgage and auto-loan payments ahead of student debt. However, as collection activity intensifies and household budgets remain stretched, financial analysts warn that pressure from student-loan repayments could spill into other areas of consumer credit performance.

Despite those concerns, the report also contained signs of resilience.

Delinquency rates across several major lending categories remained stable or improved compared with a year ago. The percentage of credit-card accounts more than 60 days past due fell to 2.97%, down from 3.09% a year earlier. Unsecured personal-loan delinquencies improved to 3.18% from 3.49%, while auto-loan delinquencies edged down to 1.49%.

However, lenders continue to absorb losses from loans that became troubled months earlier. Equifax noted that write-offs increased for both credit cards and auto loans as banks moved aging delinquent accounts off their balance sheets. The trend suggests that while newer borrowers are largely keeping up with payments, lenders are still dealing with the fallout from earlier financial stress.

For consumers carrying revolving credit-card balances, the cost remains significant. Average credit-card interest rates continue to hover above 21%, making credit-card debt among the most expensive forms of consumer borrowing. Financial advisers warn that carrying balances month after month can rapidly increase the total amount owed, particularly for households already operating on tight budgets.

The report also highlighted growing reliance on home equity as a financing tool. Outstanding balances on home-equity lines of credit (HELOCs) jumped 13% year over year to $431 billion, as homeowners tapped rising property values to access lower-cost borrowing compared with credit cards.

Meanwhile, mortgage balances increased to $12.86 trillion, while auto-loan balances rose to approximately $1.6 trillion.

Taken together, the figures paint a picture of an economy increasingly supported by borrowing, even as many consumers remain current on their obligations. The headline delinquency numbers suggest stability, but the rapid growth in subprime credit-card borrowing indicates that financial pressure remains concentrated among households with the least margin for error.

For millions of Americans, the credit card is no longer just a payment method. It has become a financial lifeline used to bridge the gap between paychecks and the rising cost of everyday life.

New York — JBizNews Desk

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