Americans are starting the new year with record debt. Here’s how they can get it under control.

Core Insights - Car-loan delinquency rates are projected to rise for the fifth consecutive year in 2026, although the increases are becoming smaller [1] - Household debt has reached a record $18.6 trillion, with mortgage balances making up the majority at $13.07 trillion [2][4] - The Federal Reserve is expected to lower its benchmark rate only once or twice in 2026, which may not provide significant relief for borrowers [4] Household Debt - The total household debt in the U.S. has ballooned to $18.6 trillion, with mortgage balances being the largest component [4] - Non-housing balances, including credit cards and auto loans, have increased, with credit card balances at $1.23 trillion and auto balances at $1.66 trillion [2] Delinquency Rates - Car-loan delinquency rates are expected to rise, while credit card delinquencies are projected to remain stable [1] - Mortgage delinquencies are anticipated to increase slightly due to a modest rise in unemployment [1] Lending Environment - Lenders have tightened underwriting standards, particularly affecting low- and middle-income households [6] - The job market will significantly influence loan approval difficulties in the upcoming year [6][7] Interest Rate Outlook - The Federal Reserve has signaled a higher threshold for interest rate cuts in 2026, which may limit relief for those burdened with debt [4] - If the Fed does cut rates, borrowers could see significant savings on mortgages, with potential savings of $929 for a 25-basis-point cut on a $370,000 loan [10] Credit Card and Auto Loan Insights - Credit card APRs are more directly influenced by the federal-funds rate, but even a full percentage point cut would only save an average cardholder $65 annually [15] - For auto loans, a 25-basis-point cut on a $30,000 loan would save $74 a year, while a 100-basis-point cut would save $295 [13] Consumer Strategies - Consumers are encouraged to improve their credit scores to take advantage of potential rate cuts [16] - Strategies include addressing delinquencies, maintaining low credit utilization, and negotiating lower interest rates with credit card issuers [20][19]