Americans Now Have Record Debt

U.S. households are now sitting on a record $14 trillion in debt; a combination of mortgages, credit cards, student loans, and other forms of debt all contribute to this massive number. Mortgages remain the largest chunk of Americans' debt, accounting for $9.44 trillion. Student loans climbed by 1.4% to $1.5 trillion, while credit card balances rose to $13 billion during the third quarter. All of that borrowing supports consumer spending — the biggest part of the U.S. modern economy. But officials warn that debt will also become harder to repay during the next recession when unemployment rises. Borrowing costs have tumbled in recent months because the Federal Reserve has slashed interest rates three meetings in a row to fight the economic slowdown at home and abroad. Those rate cuts make it cheaper for households and businesses to borrow and refinance existing debt. That easy money may ultimately help drive U.S. debt even higher.