
Household debt is on the rise, increasing $16 billion in Q2 2023, which was a 0.1% change from Q1. Meanwhile, credit card debt has broken records hitting $1 trillion according to the Federal Reserve Bank of New York.
The debt landscape

Credit card debt : Total credit card balances increased by 4.6% from last quarter, with delinquency rates returning to pre-pandemic levels.
Student Debt: Outstanding student debt payments stand at $1.57 trillion in Q2 after declining by $35 billion. Due to suspension of student loan payments and policies that restrict reporting of missed payments until Q4 next year, 90+ days delinquency rates are expected to remain low until next year.
Mortgage: Debt in this category remained stagnant in this quarter, hovering at $12.01 trillion. While total mortgage balances remained stable, who had access to these funds may have changed, with the median credit score for newly originated mortgages increasing by 4 points, to 769. This change may also be caused by the reduction of lenders’ risk aperture in the face of economic instability.
Auto loans: Debt in this category has been increasing since 2011 and saw an uptick of $20 billion, increasing to $1.582 trillion this quarter. This kind of debt seems to be most prevalent in younger consumers aged between 18-29.

Staying afloat
Student debt, credit card debt and auto loans impact young consumers the most, who are also among the lowest paid consumer groups in America. Despite a pause in student loan payments, 53% borrowers are struggling to pay their other bills, a recent survey shows. When student loan payments resume in October, more than 36% of borrowers will be making these payments for the first time.
While student debt delinquency is low at the moment, many borrowers expect to go delinquent once the forbearance period ends. This is because borrowers will have to re-evaluate their expenditures, and more than half report they will have to choose between making student loan payments and paying for other necessities.