Core Insights - The overall U.S. consumer debt reached $18.20 trillion by the end of December 2025, marking a 3.7% increase from the previous year, with a notable acceleration in the rate of increase compared to December 2023 and 2024 [1] - A K-shaped economic divide persists, indicating a widening financial gap between different income brackets, with higher-income consumers benefiting from asset inflation while others face financial pressure [1] - Delinquency rates for major lending products have begun to ease but remain elevated compared to pre-pandemic levels, with 5.7% of consumers having at least one payment 60+ days past due as of December 2025 [1] Consumer Debt Trends - Total U.S. consumer debt reached $18.20 trillion in December 2025, up 3.7% year-over-year, with month-over-month increases of 0.3% in October and 0.1% in November [2] - First mortgage balances increased to $12.82 trillion, up 4.3% year-over-year, while home equity lines of credit (HELOC) balances rose to $421.7 billion, reflecting a 12.6% increase [2] - Auto loan balances remained stable at $1.589 trillion, with a slight year-over-year increase of 0.6%, while bankcard balances grew to $1.12 trillion, up 4.1% year-over-year [2] Delinquency and Payment Behavior - The severe delinquency rate for student loans was 16.39%, indicating stabilization after earlier disruptions, with outstanding student loan balances totaling $1.33 trillion, down 1.4% year-over-year [1] - Auto loan delinquency rates increased slightly to 1.61%, while severe delinquency rates for bankcards decreased to 3.03% from 3.16% a year ago [1] - Average bankcard utilization remained stable at 21.2%, driven by rising credit limits, which increased by approximately 6.5% year-over-year [1] Market Dynamics - Leasing activity in the auto sector accelerated, with outstanding lease balances up 7.6% year-over-year to $95.8 billion, as consumers seek lower monthly payments amid high vehicle prices [1] - The consumer shift towards general-purpose credit products is evident, with private label card balances falling 11.2% year-over-year [1] - Seasonal patterns are expected to support near-term credit performance, with tax refunds likely providing relief for consumers to pay down debt [1]