New Analysis of Consumer Credit Data Finds Debt Payments Now Claim 10 Percent of Household After-Tax Income; Real Debt Payments Have Increased by Nearly 15 Percent in Three Years

September 29, 2026 | WASHINGTON, D.C. — A new analysis of consumer credit data by The Century Foundation and Protect Borrowers finds that rising household debt payments are swallowing more than half of American workers’ income gains—leaving families far further behind than wage and price data alone indicate. The report, Half of Every Dollar, combines credit records for millions of working-age adults with neighborhood income data to map an affordability crisis that traditional economic measures cannot see. Since the end of 2022, required monthly debt payments have grown 14.8 percent, more than eight times as fast as take-home pay, with a worker’s rising debt burden eating up 52 cents of every dollar they’ve gained in income.

“The economy is rigged against working families, and this report shows one big reason why. Families aren’t just paying higher costs for everything from groceries to housing, but debt is eating away at their paychecks,” said Senator Elizabeth Warren, Ranking Member of the Senate Banking Committee. “For the typical worker, more than half of every dollar of income growth is going right back out the door in debt payments. Instead of letting lenders rip off families, Donald Trump and Congressional Republicans should act today to protect families from getting trapped in cycles of debt, including a cap on credit card interest rates.”

The report finds that the typical worker’s real take-home income rose about $109 a month since the end of 2022, while that same worker’s required debt payments rose $57. In a household with two earners each carrying the average increase, combined payments rose about $114 against $109 in income, wiping out their entire real income gains. Debt payments now claim roughly 10 percent of after-tax household income for the 80 percent of working-age adults who carry consumer debt, up from 8.9 percent at the end of 2022. And workers in the bottom fifth of the income distribution lost 72 percent of their income gains to debt, compared with 32 percent for workers in the top fifth.

“In poll after poll workers tell us that they’re struggling to make ends meet, while Donald Trump and his allies insist that real wage growth proves otherwise. Our new research explains a big part of that disconnect: rising debt,” said Angela Hanks, Chief of Policy Programs at The Century Foundation. “When looking beyond prices and wages to account for household debt, we find that more than half of a worker’s income gains disappear. For a typical household with two earners, those income gains have been completely wiped out. And this isn’t just a household budget issue; it’s a labor market issue. A worker who can’t afford a gap in income can’t afford to quit a bad job, push for a raise, or take a chance on something better. Debt is quietly eroding workers’ power.” 

“No one should have to hand back half of every raise just to stay on top of debt they were forced into. Families are going further into the red just to cover basic essentials, all while the Trump administration touts hollow talking points about a booming economy and fails to deliver on promises to lower costs,” said Aissa Canchola Bañez, Policy Director for Protect Borrowers. “Today’s report shows just how dire the affordability crisis is for working people who are being forced to surrender their hard earned income gains to paying off debt and padding the pockets of credit card executives and debt collectors. Credit cards and auto loans are now more than four-fifths of what working people owe every month, and it is about to get worse as millions of student loan borrowers are pushed into costly repayment plans they cannot afford. Growing household debt is burying America’s workers and policymakers must take action to get them real relief.”

Key Findings

  • More than half of a typical worker’s raise is going to debt payments. Since the end of 2022, real take-home income for a typical household rose about $109 a month while that worker’s debt payments rose $57—meaning 52 cents of every dollar gained went to debt. In a two-earner household, the entire real income gain was lost, and then some.
  • Debt payments are growing more than eight times as fast as income. Across the same three years, real debt payments grew 14.8 percent, compared with just 1.7 percent growth in real household income. With the Federal Reserve hiking interest rates this month, that gap is likely to widen.
  • Debt payments now claim roughly 10 percent of household take-home pay. About 80 percent of working-age adults carry consumer debt, and their required monthly payments now take roughly 10 percent of after-tax household income, up from 8.9 percent at the end of 2022. Credit cards account for 44 percent of those payments and auto loans another 40 percent, with auto loans carrying the highest median payment at $471 a month.
  • The bills are nearly the same up and down the income ladder, but the paychecks are not. Despite earning lower wages, lower-wage workers don’t tend to see corresponding lower prices. The median car payment is $462 a month for workers in the bottom fifth of household income and $495 in the top fifth; the median credit card payment is $121 and $140. That nearly identical bundle takes 17 percent of take-home pay at the bottom and just 7 percent at the top. Factoring in student loans, the gap widens to 21 percent against 9 percent. Nearly 1 in 20 bottom-fifth workers owes more than 40 percent of take-home pay to debt service, more than seven times the rate at the top.
  • Racial disparities persist at every credit tier. Black workers devote 13.3 percent of after-tax household income to consumer debt payments, compared with 10.7 percent for Hispanic workers, 9.4 percent for white workers, and 6.8 percent for Asian workers. Among super-prime borrowers—the safest tier lenders recognize—Black workers’ payments still claim 13.6 percent of take-home income against 8.4 percent for white workers. The gaps persist within every credit tier and every income quintile, likely in part due to racial wealth inequality.
  • Debt burdens are heaviest in the states where incomes are lowest. Debt payments claim 13.7 percent of household take-home income in Mississippi and Louisiana, 13.1 percent in West Virginia, 12.9 percent in Arkansas, and 12.7 percent in New Mexico, compared with 7.5 percent in Washington State and 7.1 percent in Washington, D.C.
  • For millions of workers, the situation is about to get worse. Student loans currently account for just 7.5 percent of debt payments, a figure suppressed by a repayment system in administrative turmoil and litigation that has trapped millions in forbearance. Millions of borrowers must take action to keep an affordable payment or be pushed into a more costly standard ten-year repayment schedule. Under that more expensive option, the debt burden for Black women with student loans would rise from 15 percent of household income to 23 percent.
  • Every number in this report is a conservative floor. Our analysis does not capture personal loans, Buy Now, Pay Later products, or medical debt, and the authors estimate they measure 85 to 90 percent of household debt payments. The remaining, unmeasured debt is concentrated among lower-income, Black, and Hispanic households, meaning the disparities documented here are understated.
  • Rising consumer debt is a labor market problem, not just a household budget problem. High debt burdens limit workers’ bargaining power, because a worker who cannot absorb a short interruption in income has less ability to leave a job, negotiate for higher pay, or withstand a spell of unemployment. That shows up in a labor market where hiring has stalled and the quit rate has been stuck at 1.9 percent for months.

To close the gap between what the data shows and what workers experience, the authors propose a new economic measure—Real Income Net of Debt, or RIND—to be reported alongside real wages, capturing what households actually keep after required debt payments. The report also calls for a policy agenda that addresses both outstanding debt and its causes: canceling student, medical, and utility debt; capping credit card interest rates at 10 percent and banning junk fees; prohibiting employer-driven debt traps such as training repayment agreements and workplace payday loans; raising wages and expanding bargaining rights; and expanding the public goods that keep families from borrowing to cover necessities in the first place.

While debt burdens have been building for years, the Trump administration’s actions have made things worse. Trump promised to cap credit card interest rates at 10 percent when he took office and has not delivered—a delay that costs Americans an estimated $368 million in interest every day. His administration abandoned a finalized rule capping credit card late fees at $8, which could force consumers to pay an additional $10 billion a year, and has continued its effort to dismantle the Consumer Financial Protection Bureau. Cuts to the student loan repayment system and ongoing litigation have trapped millions of borrowers in forbearance, with millions more facing a shift into far more expensive repayment plans this fall. Rising energy costs under Trump have pushed roughly 14 million Americans into utility debt severe enough to be sent to collections. And, as a result of the President’s war with Iran, real average earnings fell 0.1 percent in the past year, ending in August.

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About The Century Foundation

The Century Foundation (TCF) is a progressive, independent think tank that conducts research, develops solutions, and drives policy change to make people’s lives better. We pursue economic, racial, gender, and disability equity in education, health care, and work, and promote U.S. foreign policy that fosters international cooperation, peace, and security. TCF is based in New York, with an office in Washington, D.C. Follow the organization on Twitter at @TCFdotorg and learn more at www.tcf.org.

About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.