About 1 in 12 U.S. Families Now Devotes Over 40% of Income to Debt Payments, the Highest Share in 13 Years

American borrowing has remained roughly unchanged from three years ago, but household budgets have taken on a heavier burden that raw debt totals do not show. That strain could begin to weigh on consumer spending before missed payments become widespread.

Most U.S. households have been paying more to service the debt they already carry. The Federal Reserve’s 2025 Survey of Consumer Finances found that 8.6% of families now spend more than 40% of their income on debt payments, or roughly one in 12 families.

That compares with 6.5% in 2022 and marks the highest level since the 2013 survey.

The Center for Retirement Research at Boston College recently pointed to the number in an analysis of whether consumers are likely to slow their spending. The group said the key question is not simply how many families owe money, but how much of each paycheck goes toward servicing that debt.

Borrowing Stayed Similar, but the Monthly Cost Rose

According to the Fed, the share of families with any debt held steady at about 77% between 2022 and 2025. Median debt among borrowers was little changed at $88,100. On the surface, Americans were borrowing at about the same pace as before.

The price of that borrowing climbed, however. During the survey period, the average 30-year mortgage rate increased from 4.2% to 6.7%, while the average credit card rate rose from 14.6% to 21.4%. Families that bought homes, carried card balances or refinanced after 2022 paid much more for the same amount of debt than households that locked in earlier rates.

Auto financing followed the same pattern. Average new-vehicle loan rates moved up from 4.9% to 7.7%, meaning a household replacing a car paid a larger monthly bill for the same vehicle than it would have a few years earlier.

What Happened to the Typical Borrower

The 40% threshold identifies families under severe pressure, while the median shows what happened to borrowers overall. Medians are useful because a few extreme cases can distort averages. For example, if 10 families each spend 10% of income on debt and one spends 90%, the average jumps sharply even though the median remains 10%.

Today, the median borrower spends 15.4% of income on debt payments. That is 2.0 percentage points higher than in 2022 and back to the 2019 level. The typical borrower is feeling the squeeze, while a growing minority is nearing the edge.

The share of families above the 40% line in each survey cycle was:

1. 2013: 8.2%
2. 2016: 7.0%
3. 2019: 7.4%
4. 2022: 6.5%
5. 2025: 8.6%

The general decline after 2013 reflected years of low interest rates and debt reduction after the financial crisis. One survey cycle erased nearly all of that improvement.

Higher income did not fully offset the pressure. Real median family income rose 7% to $82,200, and median net worth increased slightly to $215,900. Even so, higher borrowing costs still absorbed a larger share of many household budgets.

How the 40% Threshold Feels in Practice

Consider a household earning $75,000 a year. At the 40% level, debt payments would total $30,000 annually, or $2,500 each month.

That would leave $45,000 for taxes, groceries, utilities, insurance and healthcare. With so little room, even one unexpected car repair could end up on a credit card, making the following month’s ratio worse.

Middle-Income and Retired Households Face the Biggest Strain

The Center for Retirement Research said the most exposed groups are middle-income working-age families and the poorest retirement-age households. Middle earners often juggle a mortgage, auto loan and credit card balances at the same time, without the investment cushion available to wealthier households. Researchers noted that families with significant investment assets have felt far less pressure.

Retirees face an even tougher version of the problem. Once a retiree is carrying a mortgage, car loan or credit card bill, there are few ways to increase income when costs rise. Debt payments can weaken retirement security before healthcare expenses or inflation are even considered.

Why Spending May Slow Before Delinquencies Rise

The researchers noted that consumer spending accounts for nearly 70% of U.S. economic activity. When families send a larger share of income to lenders, they have less left for restaurants, travel and entertainment. Their margin for error is also narrowing. The personal saving rate fell to 4.1% in the third quarter of 2026, down from 5.3% in the first quarter, according to the Bureau of Economic Analysis.

For now, most households are still meeting their obligations. The credit card delinquency rate at commercial banks fell to 2.85% from 2.95% in late 2025, and the researchers do not expect a recession. They did caution that gains in the stock market may be supporting spending by wealthier households, meaning a sharp market decline could create another source of pressure.

Three Ways to Gauge Your Own Debt Burden

1. Work out your ratio. Total your required monthly mortgage, auto, student and credit card payments, then divide by your gross monthly income. Compare the result with the 15.4% median and the 40% warning level.
2. Attack the most expensive debt first. The average card APR was 21.2% as of August 2026. Every dollar of balance paid down avoids interest at that rate.
3. Eliminate consumer debt before retirement. If retirement is within about a decade, aim to clear car loans and credit card balances while you still have a paycheck.

In short, the share of Americans who borrow has stayed fairly steady, but a larger portion of income is now going to lenders. That is where the next pullback in consumer spending may begin.