News about consumer debt

Money Management International, a nonprofit credit counselor, said it managed more than $1 billion in client debt through September, its highest level since 2013, and its active debt-management plans topped 60,000, the most since 2017. Counseling volume rose 9.5% year over year, while clients referred through unpaid generative-AI searches, mainly ChatGPT, grew 48.8%. Personal loans now feature in 48% of new clients' cases, up from 35% in 2020, with average balances up 11.5% to $19,300. The Federal Reserve's 2025 Survey of Consumer Finances found 19.6% of borrowing families fell behind in the prior year, versus 12.2% in 2022. The author argues investors should favor firms whose earnings don't rely on customers borrowing more, and compare lenders' delinquency rates and credit losses.

According to Pew Research Center's analysis of government data, roughly 49% of Americans do not fall into the middle-income category, and the share of middle-class households fell from about 61% in 1971 to 51%. Pew defines middle class as household income between two-thirds and double the U.S. median; with the current median of $87,460, that range is about $57,723 to $174,920. A National Foundation for Credit Counseling survey found 53% of adults feel they cannot make financial progress and 48% say they are constantly treading water. Total U.S. consumer debt reached $18.8 trillion in the second quarter of 2026, including $1.26 trillion in credit card balances and $1.71 trillion in auto loans, while the share of families with a debt-to-income ratio above 40% rose from 6.5% to 8.6%. The article advises tracking spending and comparing insurance quotes, noting the average American spends about $2,441 a year on full-coverage auto insurance.