A new analysis by The Century Foundation and Protect Borrowers examined financial trends among working-age Americans, revealing that debt obligations are absorbing an increasing portion of income growth. The study tracked credit records for millions of individuals ages 25 to 64 alongside Census Bureau income data from late 2022 to early 2026.
According to the research, typical household real take-home monthly pay—adjusted for inflation—increased by $109 during the period examined. However, monthly debt payments rose by $57 during the same timeframe. This means approximately 52 cents of every dollar in income gains for single-earner households goes toward debt service. For two-earner households, the analysis projects that income gains are entirely consumed by debt payments and potentially exceed them.
The researchers documented that inflation-adjusted debt payments climbed nearly 15% over approximately three years, a rate roughly eight times faster than household income growth, which expanded less than 2%. The analysis encompassed credit card payments, auto loans and leases, student loans, and home equity lines of credit, though it excluded mortgages and certain other borrowing categories such as buy now, pay later arrangements and medical payment plans.
Angela Hanks, chief of policy programs at The Century Foundation, stated the findings may underestimate the financial pressure facing households. She noted that incorporating mortgage payments and installment loans not captured in credit files would have produced even higher debt burden figures. Supporting this assessment, Federal Reserve survey data from 2025 indicated that 8.6% of families allocated more than 40% of their income to debt payments, up from 6.5% in 2022.
Financial experts emphasized that even debt considered beneficial, such as mortgages and student loans, can become burdensome when extended over long periods or taken in larger amounts than necessary. Consumer finance analysts recommend evaluating total borrowing costs, repayment terms, and emergency savings capacity before assuming new debt obligations.
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