In 2025, U.S. credit card debt reached $1.3 trillion. This is the equivalent of over $3,000 in debt for every man, woman, and child in the United States. Imagine a newborn baby named Louise Smith having $3,000 in debt, along with each of her three siblings and her two parents\u2014the hypothetical Smith family\u2019s total credit card debt would amount to $18,000.\u00a0<\/p>\n
In the American economy, the outsized role of consumer credit and its accompanying debt is something relatively new. Credit cards began appearing in the 1960s and were not in widespread use until the 1980s. The Federal Reserve did not even record credit card debt until January 1968, when the figure was $1.316 billion. The 2025 figure was $1.305 trillion.<\/p>\n
If we add in a more recent variation of consumer credit\u2014\u201cBuy Now Pay Later\u201d (BNPL)\u2014consumer credit, and its attendant debt, climb ever higher. About half of Americans have used the BNPL form of credit, and between 2019 and 2023 the BNPL industry grew<\/a> from $2 billion to $120 billion, a 690-fold increase in four years. Though BNPL debt has been called \u201cphantom debt\u201d because much of it goes unreported, the amount of BNPL debt outstanding is still estimated to be about $700 billion<\/a>.\u00a0\u00a0<\/p>\n In any case, just credit card and BNPL debt taken together amount to roughly $2 trillion in the United States today. Almost half of American credit card holders carry debt on their cards, and almost a quarter of those cardholders<\/a> say they don\u2019t think they\u2019ll ever pay it off. Yet the extent of consumer credit in America and the huge amount of debt incurred with it, has raised no great alarm.\u00a0<\/p>\n But it should. The advent of widespread consumer credit in the last half-century has carried with it, and may well have caused, an almost seismic shift in our cultural norms; from thrift to carefree spending, from debt as shameful to debt as no big deal. More importantly, consumer credit, which props up the 70 percent of our GDP that is basically \u201cshopping,\u201d has played the role of a great class leveler.\u00a0 For the large number of Americans who rely on consumer credit to supplement their income, what might otherwise be a general outrage at income inequality (with a focus on the rich) appears to have been numbed by easy credit.<\/p>\n The Occupy Wall Street movement of more than a decade ago is instructive here. Though it might seem a good example of populist outrage against the rich, looking at it in detail suggests that may not be the case; it is the exception that proves the rule. Protesters took over Zuccotti Park in New York City in September 2011, as well as parks and plazas in many other cities. In Washington, D.C., where I live part of each year, I regularly walked through the encampment at Freedom Plaza on Pennsylvania Avenue on my way to work. In talking with many of the protesters, and noting one of their key slogans \u201cWe are the 99%,\u201d my impression was that the majority of the people camping out were a lot closer to the 1 percent than they wanted to admit.\u00a0 Richard Reeves, in his book\u00a0Dream Hoarders: How The American Upper Middle Class Is Leaving Everyone Else In The Dust, Why That Is A Problem, And What To Do About It corroborates that impression, noting that more than one-third of the protesters in the May Day Occupy march in 2011 had incomes greater than $100,000. Indeed, the \u201ceat the rich\u201d populism I observed on Freedom Plaza seemed a minority position. And by February 2012, the D.C. occupiers were gone.<\/p>\n Francis Fukuyama has argued that populism for the majority is not about any economic plight but about a sense that they are neither recognized nor respected<\/a>. Their grievance, that of the real \u201c99%\u201d which includes many on the MAGA right, is not about capitalism, or the rich as economic oppressors, but about the coastal cultural elites. It is these elites who are the culprits; resented not because of their money (the elites are not necessarily rich) but because it is believed that they look down on and disrespect \u201cregular\u201d folks.\u00a0 As for the real rich, Americans who are not doing well financially do not seem to resent them.\u00a0<\/p>\n One likely reason for the lack of an animus toward the rich is that buying on credit can enable the non-rich to have a life of instant gratification; no need to deny oneself the pleasures of restaurants, travel, or satisfying the whims of one\u2019s children\u2014in short, one can obtain a lifestyle that, if one doesn\u2019t look too closely, can seem like that of rich people.\u00a0\u00a0<\/p>\n The provocative economist Thorstein Veblen, in his 1899 Theory of the Leisure Class, put the lie to Karl Marx\u2019s conviction that the workers would recognize their oppression by rich owners and rise in revolt. Instead, Veblen\u2019s worker seeks to emulate the rich. (Had Veblen lived to the end of the 20th century, he might well have cited the popularity of Lifestyles of the Rich and Famous, which ran for a decade.) Access to consumer credit (almost 80 percent of Americans hold at least one \u201cgeneral purpose\u201d credit card) not only helps maintain the illusion that we are all the same, it plays a role in suppressing any tendency to revolt.\u00a0<\/p>\n It is interesting that James Carville, the Democratic campaign guru turned pundit, recently suggested<\/a> that the time may be ripe for a revolution in America: \u201cIf you\u2019re a student of history, the French Revolution is in the American wind. While the stock market soars, Mr. Trump and decades of corrupt and morally bankrupt Republican economic agendas have splintered the very heart of the American economy. \u2026 Le peuple se l\u00e8ve.\u201d Given the huge and growing gap dividing the richest from the rest of us, one might indeed be excused to think that the \u201crest\u201d (the majority of Americans) might rise up. In France\u2014always a great choice for invidious comparisons\u2014protesters in September 2025 carried signs reading: \u201cTax the rich,\u201d \u201cThere\u2019s no real trickle-down,\u201d \u201cAbolish privileges,\u201d and \u201cEmpty the pockets of the rich to fill the hole in social security.\u201d\u00a0<\/p>\n In contrast to the U.S., the French still rely on checks and cash, and many who use cards use debit cards. Statistics vary, but a rough estimate is that the French hold roughly three times the number of debit cards as they do credit cards, and per capita credit card use in the U.S. is nine times greater<\/a> than in France.\u00a0<\/p>\n The French relationship to money is also more ambiguous than ours. Many people I know in France\u2014where I live for half of the year\u2014think that no one should get super rich. Still, there are billionaires in France, 52 of them<\/a>, but as a percent of population that is 3.5 times less than in the U.S, which currently boasts 900 billionaires. For many French people, money is necessary to live, but security\u2014a steady salary and a pension, and especially not having to worry about health care\u2014is valued more than the accumulation of money. It is impolite in France to talk about one\u2019s income, much less ask someone what they make. The average French person resents the \u201crentier,\u201d someone who makes his or her money from property or dividends and capital gains as opposed\u00a0 to those who earn their income from \u201chonest\u201d work. And while unionization has declined significantly in the U.S., it remains strong in France<\/a>, reflecting (and contributing to) a greater sense of class consciousness.\u00a0<\/p>\n Actual income inequality in France is also far less than in the U.S.\u2014and in fact, income inequality in France has decreased significantly<\/a> in the last 100 years\u2014and yet the French protest. In the U.S. income inequality has increased, and yet the majority of Americans do not seem to support a fairer distribution of wealth.<\/p>\n Indeed, there are few signs of a populist revolt against the rich, not to mention against the political economy that enables their growth. And this is despite rather striking data on inequality. Per one New York Times report<\/a>, 69 percent of America\u2019s wealth is held by families in the\u00a0top 10 percent<\/a>. The investments held by those families have grown about threefold, from roughly $15 trillion in 2010 to more than $45 trillion today. Between 1989 and 2022, households in the top 1 percent added about 100 times as much wealth as households at the national median,\u00a0according to Oxfam<\/a>, and almost 1,000 times as much as a household in the 20th percentile.\u00a0<\/p>\n The wealth of our 900 American billionaires has also continued to increase<\/a> (an 18 percent leap in 2025). Yet, to vindicate Veblen, 69 percent of respondents in a 2019 Cato Institute poll<\/a> believed that billionaires \u201cearned their wealth by creating value for others.\u201d The majority of those respondents also agreed that \u201cwe are all better off when people get rich.\u201d While that sentiment seems to have softened a bit\u2014more people now believe<\/a> the rich ought to be taxed more than they are\u2014we are clearly far from a revolution. On the contrary, aside from expressing dissatisfaction about affordability at the polling booth, we continue to chug along as if all is basically okay.\u00a0<\/p>\n Enter consumer credit. Let\u2019s start with its role in how we spend. About 70 percent of our gross domestic product is based on consumer spending, which reached $16.35 trillion in June 2025, up from $1.35 billion in 1947<\/a> (adjusted for inflation, this is a more than 800-fold increase compared to the less than three-fold increase in population in the same period; from 144 million to 342 million.) In terms of percentage of GDP, our spending on consumption during those years went from half of 1 percent of GDP to 70 percent. About 70 percent of retail purchases are done on credit. And since so many of us spend with money we don\u2019t really have (consumer credit) we naturally run up debt.\u00a0<\/p>\n Easy consumer credit, and the almost inevitable debt that accompanies it, dovetails with a major shift in our moral compass. Being in debt used to be shameful. In the case of credit card or BNPL debt, as long as the monthly minimum is paid, not only is there no criminal penalty, there is little shame associated with it. Moreover, credit card debt especially can appear to the individual debtor as benign, or even unnoticed. With an unpaid rolling balance of $5,000 to $10,000, the bank issuing the card is not going to dun you. On the contrary, it is in the bank\u2019s interest not to have you pay it off. As long as you pay the monthly minimum, and of course absorb the 20 percent or more interest, the illusion that all is well is easy to maintain.\u00a0\u00a0<\/p>\n Affordability is on everyone\u2019s mind these days, but consumer credit has rendered the concept a bit more complicated than just the price of goods. In the past what was \u201caffordable\u201d was related to the money one had on hand. If you had $45 of disposable surplus money, you could afford to buy something that cost $45. The expansion of consumer credit has eliminated that connection. Americans have by and large lost the notion of thrift. The very term \u201cthrift,\u201d which was used in the naming of quite a few banks in the past, captures the moral basis of savings. In 1910 the Morris Plan Thrift bank<\/a> came along, making consumption loans to working-class people based on peer references and one\u2019s personal character\u2014loans made without collateral.\u00a0<\/p>\n By 1931, Morris institutions existed in 142 cities. But this was not easy credit. The payment terms were strict because debt was to be avoided. Not only did borrowers have to pay fees and interest, they were required to buy \u201cClass C Installment Thrift Certificates\u201d weekly to pay off the loan, and in the event of default, the two people who had provided peer references would have to pay off the loan. The linkage of consumption and saving remained strong well into the second half of the 20th century.<\/p>\n The first general purpose credit card was the BankAmericard in 1958. Early credit cards had to be applied for and not everyone qualified. Only in the 1980s did credit cards begin to become easily available, and part of the credit expansion in the 1980s had to do with the issuing of unsolicited credit cards<\/a> to college students. While the rationale was ostensibly to engage people with high earning potential early on in their careers, the card issuers must also have understood that young people are particularly susceptible to the temptation of buying something one cannot immediately afford. Four decades later, in 2025, close to three-quarters<\/a> of all retail purchases were done using credit cards.<\/p>\n If your income is inadequate to buy what you want, you do not have to feel inferior to wealthier people since you can have what they have, or at least a version of it, and you can have it right away. If the rich have dedicated home theaters with surround sound and 1,000 square-foot gyms in their mega mansions, you can have a 100-inch TV in your living room and maybe even a Peloton in the basement. Having these markers of the good life, things that symbolize \u201cluxury,\u201d\u2014 can take the edge off any sense of shame in not being rich. With a credit card (and other forms of consumer credit like BNPL), one does not have to forgo the things one can\u2019t afford. Indeed, it seems plausible that while many lower and middle-income people see the unfairness of the system in the abstract, they do not actually \u201cfeel\u201d it. With a couple of credit cards in your wallet, eating the rich seems less appetizing.<\/p>\n","protected":false},"excerpt":{"rendered":"In 2025, U.S. credit card debt reached $1.3 trillion. 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