Name: Americans debt hits a new record high: Here are tips to pay it off
Uploaded: 2025-11-06T17:38:58.592Z
Duration: 3 min 4 s
Description: A new Federal Reserve report shows total household debt is more than $18 trillion, which is equivalent to nearly half the size of the U.S. economy. CBS News business analyst Jill Schlesinger has tips to help you cut down on your debt.

A new Federal Reserve report shows total household debt is more than $18 trillion, which is equivalent to nearly half the size of the U.S. economy. CBS News business analyst Jill Schlesinger has tips to help you cut down on your debt.

New York

U.S. household debt has reached an unprecedented level, exceeding $18 trillion according to a recent Federal Reserve report. This figure represents nearly half the size of the U.S. economy, with a significant portion attributed to mortgages.

Financial analyst Jill Schlesinger recommends individuals focus on paying off high-interest debts, such as credit cards, before addressing lower-interest loans. She also advises against paying off mortgages early due to the importance of liquidity and the prevalence of low mortgage rates, and encourages those struggling with debt to seek assistance from creditors or consider consulting a bankruptcy attorney if necessary.

Americans debt hits a new record high: Here are tips to pay it off

We're going to begin this hour with today's Money Watch for you. We're talking about Americans spiring debt, which has hit a record high. A new Federal Reserve report shows total household debt is more than $18 trillion. You heard me right with a T. That's the equivalent to nearly half of the size of the U.S. economy. Think about that for just one second. CBS News business analyst Jill Schlesinger is thinking about it. She's got some tips just to help you out this morning. Jill, always good to have you here because your advice is always so spot on. You know, I'm thinking about people that have multiple, multiple debt. How do you decide which one to pay off first? How do you prioritize? So, I think that these numbers are always astounding. But if you go down to our individual levels, if you have a few thousand dollars in credit card debt and then there's a student loan and then there's an auto loan, it can really freeze you into inaction. I always like going with the highest interest debt first. That's usually a credit card, which is really right now around 20 percent. Highest interest and you work your way down. So it might go, we'll start with my credit card, which is 25 percent. I'll try to put all of my money focused on that. If I have some free money after that, maybe I'll look at my auto loan, which is also a high rate. And then the student loan. I want to make sure that people understand that these numbers are huge. A lot of that number that we just said, that 18 trillion, is also mortgages. I kind of consider mortgages good debt, not bad debt because it helps, well, just because it helps you buy something that you hope appreciates in value. And yet you say homeowners shouldn't pay off their mortgages early. Two reasons why. Because we want people to have access to their money. What we know now is prices are going up. If you use the money on hand to pay down your mortgage and something happens later, what are you going to do? Oh, I'm going to take my dining room into the hospital because I have an unpaid hospital bill that I have to make. You want to have access to your money. Also want to say more than half of the people who have mortgages right now, those rates are under 4 percent and 70 percent have rates under 5 percent. Try not to pay down a mortgage too quickly. If things are really bad, how do you know they're bad enough that you should declare bankruptcy? Well, I think that first of all- Because we hear about wealthy people doing it. Yeah, and companies, by the way. So the bankruptcy law exists for a fresh start. If you are banging up against this and you cannot make any headway, you talk to a bankruptcy attorney, you learn what the process is about. Because this is not to be taken lightly. You're going to basically trash your credit for five, six, seven years. You're not going to be able to borrow more money. And you may not have every single one of your liens dismissed. If you owe the IRS money, that's not going to be dismissed. If you owe alimony or child support, that's not going to be dismissed. And student loans are not dismissible under bankruptcy laws. Can you just like move to Costa Rica and start a new life? Well, yes. I mean, I think there's a movie about that somewhere, but I wouldn't suggest it. Also, just one other thing about credit cards. Please call these companies and ask for some relief, especially if you're a government worker. You've just gotten laid off. Communicate with them. They'll work with you. You don't ask, you don't get. Those mouths don't get fed. Exactly right. All right. Jill, you're the best. I appreciate you.

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