Squeezed by inflation, more Americans are falling behind on debt payments

Rising U.S. prices are squeezing household budgets, causing more Americans to fall behind on their debt payments, recent financial data shows.

The share of households behind on their mortgages reached a six-year high, although the measure remains far below its peak during the Great Recession.

Almost 9% of U.S. households spent more than 40% of their income on debt repayment in 2025, the highest level since 2010, according to the Federal Reserve's Survey of Consumer Finances.

More Americans over 70 are struggling with debt, with their share of auto loan accounts in delinquency at its highest level since the New York Fed began tracking the metric in 2000. Credit card delinquency among people over 70 is at its highest level since 2011, the analysis also found.

More than half of Americans relied on credit cards to pay for basic needs like groceries, rent and utilities, according to a March survey from Debt.com. Almost six in 10 said inflation was causing them to carry a bigger credit card balance than a year earlier, the same survey found.

The worsening debt situation reflects the impact of inflation on household finances, said Kelly Regan, a certified financial planner at financial advisory firm Girard.

Credit cards are "kind of like the safety valve if you have no emergency savings left," Regan told CBS News. "We have an issue that if prices are increasing, especially more than people's wage growth, we're going to have a gap where things are going to cost more. And if you don't have any savings or are able to find those savings somehow in your budget, you're going to accrue debt."

Adding to the crunch is that wage growth is lagging inflation, meaning that millions of households have lost purchasing power. That's also depressing consumer sentiment and squeezing people coping with higher prices, according to economists.

"Frustration over cost of living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year," Joanne Hsu, the director of the Surveys of Consumers, said in a statement.

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