In the third quarter, total household debt increased by $334 billion, reaching $19.1 trillion, as reported by the Federal Reserve Bank of New York. This figure excludes an estimated $220 billion in medical debt, which can become difficult to track when consumers use credit cards or other borrowing methods to pay medical bills.
Jim Triggs, CEO of Money Management International, noted that 20% of their debt counseling clients cited medical hardships as a reason for their debt. Additionally, a 2025 study by the Consumer Financial Protection Bureau found that 17% of surveyed households still owed money on loans or credit cards used for medical expenses.
Credit card debt alone surged to a record $1.29 trillion, while home equity lines of credit rose to $481 billion, marking the largest quarterly increase since 2005. These trends reflect broader affordability challenges for consumers amid ongoing inflation.
Julie Margetta Morgan from The Century Foundation emphasized the complexity of medical debt, particularly for those on high-deductible health plans who still face significant out-of-pocket expenses. The median amount of medical debt in collections is reported to be $1,492.
Personal accounts, such as that of Jessica Colon, illustrate how quickly medical debt can escalate when combined with high-interest credit card debt. Experts recommend that consumers review medical bills for errors and seek financial assistance from providers before resorting to high-interest credit options.
The overall situation underscores the need for consumers to be proactive in managing medical expenses to avoid falling into deeper debt