U.S. household debt hit a new high at the end of last year

According to the Federal Reserve Bank of New York, the last three months of 2018 saw total U.S. household debt rise to $13.54 trillion. That means American households are carrying $869 billion more in debt than the last time they hit peak debt, in the summer of 2008.

Unlike that last debt peak — which coincided with the middle of the last financial crisis — the latest rise wasn’t driven by mortgage debt. Instead, the New York Fed data indicate that steady auto loan growth, along with rising student loan and credit card debt, has fueled the rise in total debt.

Despite rising debt levels, most Americans were still paying their accounts on time at the end of 2018, according to the New York Fed. In fact, the report indicated that 95.4% of account balances were in good standing, meaning Americans are largely meeting their minimum-payment obligations — even though they’re carrying more debt overall.

As auto loan debt continued to rise in 2018, with a $9 billion increase in the fourth quarter, most of the growth in auto loans came from borrowers with good credit. However, the rate of people falling more than 90 days behind on their monthly auto payments rose to 2.4% in Q4 2018, nearly double the postrecession low of 1.5% seen in 2012.

The New York Fed data showed that the groups having the most trouble keeping up with their auto loan payments were younger adults and borrowers with lower credit.

Taken as a whole, this new data contribute to the mixed picture of the U.S. economy that has emerged in recent months.

If you’re feeling the strain and want to reduce your overall debt, here are some steps you might consider.

• Take a look at your income and expenses to come up with a realistic budget.
• Prioritize your spending, freeing up as much money as you can to dedicate to your debt.
• Put together a debt-repayment strategy that works for you — this might be paying down debt with the highest interest rate first or debt with the highest balance first.