TurboDebt® Report: State of Debt in 2026

Consumer Debt in the United States

Persistent inflation after the pandemic recession has left many consumers struggling with debts from multiple sources. By the end of 2025, household debt balances in the U.S. reached $18.2 trillion. Consumer debt includes mortgages, loans (auto, student, and personal), and credit cards.

As housing prices and interest rates remain elevated, consumers have taken on increased mortgage debt. Credit card spending is also up, with some of the highest APRs ever recorded putting additional strain on consumers who carry a monthly balance.

Here’s a look at the makeup of consumer debt in the U.S.:

^{Source: Equifax Credit Trends Report, January 2026}

Credit scores remain high, with the national average a strong 715 (PDF). This indicates that many consumers can open lines of credit or take out loans with favorable terms due to good or excellent credit.

Consumers are also monitoring their credit more, with young people leading the charge. An estimated 46% of Gen Z consumers (ages 18-28) and 45% of Millennials (ages 29-44) monitor their credit score monthly. However, what consumers do with this data remains uncertain, as many admit they lack the knowledge and tools to improve their finances.

Understanding the debt landscape in America reveals how economic trends impact individual consumers. This data offers financial insights and empowers individuals to make smart fiscal decisions.

Individual Consumer Debt

Surprisingly, consumer debt balances in the U.S. actually decreased slightly in the second quarter of 2025. In June, the average consumer debt was $104,755, declining from $105,580 during the same month in 2024. However, after an increase in total U.S. consumer debt from Q3 to Q4 of 2025, the new year is likely to see that number jump back up.

Mortgages make up the largest source of consumer debt and grew by $98 billion in Quarter 4 of 2025. Auto and student loans are tied for the next biggest categories, followed by credit cards and personal loans, including Home Equity Lines of Credit (HELOC) balances.

A significant rise in HELOC debt suggests more consumers are borrowing against their home equity to pay for other needs. In 2025, HELOC balances rose by 9%.

For many Americans, actively paying off debt is a big focus for their financial goals. In a survey, 49% of U.S. consumers interviewed said they were trying to repay debts. This trend of more consumers pursuing debt relief, either on their own or through a professional organization, could shape the financial success of many families and individuals across the country in 2026 and beyond.

Credit Card Debt

Outstanding balances on credit cards (except those issued by specific retailers) rose by 4.1% in 2025 (PDF). The average consumer carries $6,735 in credit card debt, a slight 0.5% increase from the year before.

Credit card balances are often a leading cause of debt as consumers struggle to make monthly payments. Because credit cards are revolving debt, consumers can defer payments and carry a balance in favor of paying off secured debt like auto loans. However, falling behind for just one billing cycle can result in heavy fees and interest, making it harder to pay off the card in full.

Americans are also opening more credit cards, perhaps to earn rewards like cash back or to move debt using a balance transfer. Total accounts now top 591 million, a 4.4% increase from the previous year.

Debt by State

Although affected by population and policy, many states recorded a significant amount of debt per person in 2025. Here’s a look at each state’s average debt by consumer:

Average Consumer Debt by State in 2025

^{Source: Experian Consumer Debt Study}

While the average debt per state tells one story, it’s important to consider each state’s debt-to-income ratio (DTI). While some states carry higher debt balances per individual, examining debt-to-income ratios reveals the extent of financial distress consumers face.

For example, the small area of Washington, D.C., has an average debt per consumer of $156,868, larger than any state. However, the nation’s capital also has one of the lowest debt-to-income ratios, indicating that consumers there earn enough income to offset heavy debt balances.

Conversely, residents of Iowa carry an average debt of over $80,000 with a DTI of 1.938, one of the highest in the country. This means that for every dollar they earn, they owe nearly double that amount in debt without the income to support it.

The charts below show the states with the highest and lowest DTIs:

States With the Highest DTI

States With the Lowest DTI

^{Source: Federal Reserve Report State-Level Debt-to-Income Ratio}

States With the Highest Cost of Living

Looking at the cost of living per state also shows where residents are paying more for basic goods and services across the U.S. This can lead to debt and credit card spending to cover essential costs. Here’s a snapshot of which states carry the highest costs of living based on how closely they align with the national average:

1. Hawaii (66% more)
2. Massachusetts (48% more)
3. California (40% more)
4. Alaska (24% more)
5. New York (23% more)
6. Washington (17% more)
7. Maryland (15% more)
8. Vermont (14% more)
9. Maine (13% more)
10. Connecticut (13% more)

^{Note: Values show percentage higher than the average cost of living in the U.S.}

Debt by Age

Consumers take on more debt at different stages of life, with those in prime earning years generally owing the most due to household costs, homeownership, and lifestyle choices. While younger consumers often take on the most student loan debt, those in later years tend to shrink their debts after retirement. Consumers in the middle years tend to carry the most debt from mortgages and HELOCs.

This chart shows the range of debt carried by consumers at various ages:

^{Source: Experian Consumer Debt Study}

What Can You Do About Debt?

While secured debts, such as a mortgage or auto loan, require complex refinancing to help alleviate costs, consumers carrying unsecured debt have options beyond deferring payments and struggling with unpaid bills.

Outstanding debts from credit cards and personal loans are often manageable when consumers pursue debt relief through a professional organization. Consider the following solutions to relieve unsecured debts:

• Debt Consolidation
  Consolidating debt involves opening a balance transfer credit card or taking out a debt consolidation loan to move debts into one account, creating a single monthly payment. Consolidation works best for consumers with strong credit scores, as higher scores facilitate qualifying for lower interest rates, making debt repayment more cost-effective.
• Debt Management
  Another solution for overcoming debt is enrolling in a debt management program through a credit counseling service. These programs manage monthly bills to help consumers avoid missed or late payments. Customers send a single monthly payment to the organization, which pays each creditor on the client’s behalf.
• Debt Settlement
  Consumers facing financial burdens from credit cards and personal loans often benefit from debt settlement, where a debt relief organization negotiates with creditors to reduce a consumer's overall debt balance in exchange for a lump-sum payment. Consumers set up a savings account with the organization and make monthly payments until they build up enough to settle their debt with lenders.

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