Americans’ credit card debt falls, but past-due student loans drag on credit scores
By Alicia Wallace, CNN
(CNN) — Americans tidied up their household balance sheets to start 2025, cleaning up some credit card and auto loan debt, new data showed Tuesday.
However, the debt outlook for millions of student loan borrowers was much grimmer: Past-due student loans hit credit reports for the first time in five years, tanking credit scores in the process.
The latest snapshot of how economy-powering consumers are managing their debt loads was released Tuesday by the Federal Reserve Bank of New York, in the closely watched Quarterly Report on Household Debt and Credit.
During the first quarter, total household debt increased by $167 billion, just 0.9%, to $18.2 trillion, according to the report. Credit card and auto loan balances fell by $29 billion and $13 billion, respectively.
The first quarter typically sees a pullback in credit card debt as consumers rein in post-holiday spending and pay off those purchases.
“Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year,” Daniel Mangrum, research economist at the New York Fed, said in a statement. “However, the first batch of past due student loans were reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers.”
Student loan delinquencies expectedly jumped to 7.74% from 1% following the ending of a pandemic-era pause of reporting past-due loans on credit reports, according to the report.
This story is developing and will be updated.
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