Debt Payments Now Take 52 Cents of Every Dollar of Real Income Gains, Study Finds
A new analysis estimates a typical one-earner household sends 52 cents of each inflation-adjusted dollar gained since 2022 to debt payments. Here is what it means.
Americans' raises may not be going as far as they look. A new analysis from two groups, the nonpartisan think tank The Century Foundation and the consumer advocacy organization Protect Borrowers, estimates that a growing share of income gains is going straight to debt payments, leaving less to spend or save.
What the research found
The researchers estimate that a typical U.S. household's real take-home monthly pay rose $109 between late 2022 and early 2026. "Real" means pay after accounting for inflation.
For a one-earner household, they estimate 52 cents of every dollar of that gain goes to higher debt payments. For a two-earner household, they project the whole real income gain, and then some, goes toward debt.
Over roughly three years, inflation-adjusted debt payments rose nearly 15%. That is about eight times as fast as household income, which grew less than 2%.
What is and isn't counted
The team analyzed credit records for millions of Americans ages 25 to 64, along with Census Bureau income data. The payments they counted cover credit cards, auto loans and leases, student loans, and home equity lines of credit.
Mortgages are not included. Neither are some other forms of borrowing, such as many buy now, pay later loans and medical payment plans.
Angela Hanks, who is chief of policy programs at The Century Foundation, said the true pressure on households may be greater than the findings show. She called the results "perhaps the rosiest analysis that we could have done using the data." Adding mortgages and installment loans not found in a credit file, such as payday loans, would have made payments higher, she said.
Federal Reserve data points the same way
In the Fed's most recent Survey of Consumer Finances, 8.6% of families put more than 40% of their income toward debt payments in 2025. That is up from 6.5% in 2022 and the highest level since the 2013 survey.
The CNBC report also notes that more consumers are leaning on credit cards for basic expenses when paychecks fall short.
Why length and size of debt matter
Mortgages and student loans are often called "good debt" because they may build wealth or earning power. But even useful debt, or debt taken on for necessities, can become a burden.
Matt Schulz, chief consumer finance analyst at LendingTree, said trouble starts when debt drags on for months or years. His examples included a seven-year auto loan or a longer or bigger mortgage than you would ideally want.
What it means for you
If a raise has not made your budget feel looser, rising debt payments may be part of the reason. The experts quoted suggest understanding why you are borrowing, budgeting and comparing prices to keep debt from growing into a bigger burden.
Pay attention to loan length and size, since those are the points Schulz flagged as risky. Also remember the study leaves out mortgages and many buy now, pay later plans, so your own total payments could be higher than the study's figures.
Also read S&P 500 Falls 1.1% as Hot Inflation Report Hits AI Stocks and Lifts Fed Hike Bets
Quick answers
Who produced the 52-cent estimate?
The Century Foundation and Protect Borrowers, using credit records for millions of Americans ages 25 to 64 plus Census Bureau income data.
Does the study include mortgages?
No. It counts payments on credit cards, auto loans and leases, student loans, and home equity lines of credit. Mortgages and many buy now, pay later loans are left out.
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