US household debt rose to an all-time high of $18.8 trillion in the first quarter of 2026, according to the latest data from the Federal Reserve Bank of New York. The figure covers credit cards, mortgages, student loans and auto loans.
Mortgage balances increased $21 billion in the first quarter of the year to $13.19 trillion, while home equity lines of credit (HELOC) balances grew $12 billion to $446 billion, and auto loan balances increased $18 billion to $1.69 trillion.
However, not all categories rose. Non-housing debt balances decreased by $15 billion from last quarter, driven largely by a drop in credit card balances.
Credit card balances fell by $25 billion to $1.25 trillion, the report said. Credit card debt typically increases toward the end of the fourth quarter as consumer spending increases during the holiday shopping season and then recedes at the beginning of the year.
Overall delinquency rates changed little in the first quarter.
Credit card debt falls to $1.25 trillion
Americans owed about $1.25 trillion on their credit cards at the beginning of the year, a decrease from the previous quarter and likely reflecting lower consumer spending after the holiday season.
Still, this decline was relatively modest compared to increases seen in other debt categories.
“Aggregate household debt levels rose slightly, with modest increases in most types of debt offsetting a seasonal decline in credit card balances,” said Daniel Mangrum, a research economist at the New York Federal Reserve. “Delinquency transition rates remained mostly stable, while student loan delinquencies are returning to pre-pandemic levels.”
Despite lower credit card balances, Americans are still feeling the impact of rising costs, particularly at the pump.
The Consumer Price Index for April showed prices were 3.8% higher than a year ago, the largest annual increase in three years, and a 0.6% monthly increase, largely due to rising energy costs.
The national average cost of a gallon of regular gasoline is $4.504, 25 cents more for the second consecutive week and the highest level since 2022.
Read more: When will gas prices go down? When drivers could finally see relief.
How a Balance Transfer Credit Card Can Help You Pay Off Debt
If you’re looking to reduce your credit card debt, a balance transfer credit card could be a smart move.
These cards offer an introductory APR on transferred balances, typically 0% APR for several months after account opening. This means you can transfer your balance to this new card and begin paying it off without accruing additional interest during that period.
For example, let’s say you have a credit card balance of $10,000 and your current APR is 23% with a minimum payment of about $290 per month. With this minimum payment, it would take you 352 months to pay off your balance, and you will have paid more than $18,000 in interest over the course of that time, assuming you only make the minimum payment.
Now, let’s say you opt for a balance transfer card with a 0% to 12-month interest period. Even after paying a 3% balance transfer fee, you could save approximately $3,551.59 in interest and fees and pay off your balance in 45 months.
Read more: Best balance transfer credit cards for May 2026: Pay no interest until 2027
Alternative debt payment strategies to save interest
In some cases, you may not want to consider a new credit card, or perhaps your credit score is not enough to approve a balance transfer.
There are still ways to save on interest while you work to pay off your balance.
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Make a payment greater than the minimum: If you have room in your budget, making more than the minimum monthly payment can reduce your overall balance quickly and save money on interest over time. Even if you don’t do this every month, every little bit counts.
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Use any windfall to reduce your balance: The tax refund or job bonus waiting for you could be the key to reducing your monthly credit card payments and overall interest burden. Before you use it to book your summer vacation or finance a shopping spree, crunch the numbers to see how using your windfall could lower your payment and free up cash in your monthly budget.
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Negotiate a lower APR: Having a strong history of on-time payments can be beneficial to you. It doesn’t hurt to contact your issuer and see if they can lower your APR, even temporarily, to make your credit card payments more manageable and reduce the amount you pay in interest.