Household debt reached record levels in the fourth quarter of 2024, as consumers dealt with inflated prices and high interest rates. 

The Federal Reserve Bank of New York reported that household debt rose by $93 billion during the quarter, reaching $18.04 trillion at the end of 2024. Credit card debt accounted for a $45 billion increase from the previous quarter, reaching $1.21 trillion.  

Although the bank noted that consumers are effectively managing household debt, their ability to repay loans remains under strain due to rising interest rates. 

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“Overall, consumers are in pretty good shape in terms of the household debt landscape, largely driven by stable balances and solid performance in mortgage loans,” the bank wrote in its report. “However, for auto loans, higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers across the income and credit score spectrum.”

The report classified household debt by considering the amount owed on credit cards, mortgages, student loans, auto loans and home equity lines of credit. It shows a small uptick in delinquency rates, with 3.6% of total debt now overdue.  

Serious delinquency rates, which refer to payments that are overdue by 90 days, rose for auto loans, credit cards, and HELOC balances. Yet, they remained steady for mortgages. 

Mortgages experienced a significant increase of $11 billion in the fourth quarter, reaching $12.6 trillion in 2024. Auto loans experienced a similar increase, rising to $1.7 trillion by the end of the year. 

According to the New York Fed, auto loan balances have steadily increased since 2011, with a $48 billion rise in 2024 alone. This growth is attributed to high car prices and interest rates, which have raised monthly payments. 

As a result, consumers’ financing methods for purchasing cars have been impacted. 

“The episode of rapidly rising car prices has had heterogeneous impacts on borrowers, who have shifted between used and new cars as well as between loans and leases,” the report stated. “These shifts have put additional pressure on lower-income and lower-credit-score borrowers who may have had to opt for higher-price used cars over the last few years.”