Desert highway with "Get Out of Debt" road markings

U.S. Consumer Credit Woes & Managing Yours

According to the latest data from Lending Tree, U.S. consumer credit usage is expected to rise significantly through 2026. This trend may be attributed to increasingly accessible credit services, the current economy, and a surge in online shopping, which often offers easy credit options.

Other significant data from 2025 includes:

  • Credit usage is at its highest since the New York Fed began tracking it in 1999.
  • Consumers’ total credit card balance is $1.233 trillion as of the third quarter of 2025.
  • The national average card debt among cardholders with unpaid balances in Q3 2025 was $7,886.

How to manage credit

Managing one's credit usage is crucial to maintaining financial independence. Here are some strategies to consider:

  • Understand credit utilization - Keeping the percentage of total available credit used low is vital. A generally recommended ratio is below 30%.
  • Make timely payments - Always pay bills on time. Late payments can negatively impact one's credit score.
  • Maintain an active credit history - A long, healthy credit history can significantly improve one's credit score. It's essential not close old credit cards with a zero balance, as they may help improve credit history.

Methods for credit reduction

Reducing credit usage is essential to help avoid being overwhelmed by debt. Here are some time-proven strategies:

  • Prioritize high-interest debt - Pay off the debt with the highest interest rate first. This method, known as the 'avalanche' method, can potentially save you money over time.
  • Follow a budget - Stick to a strict plan with a clear debt-repayment strategy. It can be a gradual process, but good planning can make it manageable.
  • Establish an emergency fund - This fund provides cash to cover unexpected expenses by avoiding credit card use.

Professionals who can help

There are several paths to manage and reduce credit.

Credit counseling agencies - These agencies can provide advice on debt management, help develop a budget, and offer free educational materials and workshops.

Debt relief services - These services negotiate with creditors and may seek a "settlement" to resolve the debt.

Financial professional - They can provide guidance on managing finances, including credit management strategies and debt reduction.

With understanding, planning, and professional guidance, it is possible to utilize credit effectively without becoming mired in debt.

Not Sure Which IRA Strategy Is Right for You?

Have questions about managing debt as part of your retirement plan? Schedule a complimentary consultation with J. Martin Wealth Management: (480) 630-6177. Serving clients in Chandler, Gilbert, Maricopa, and Gold Canyon.

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Jeff Martin, CRPC®, is President of J. Martin Wealth Management, LLC and an Investment Adviser Representative of Tucker Asset Management LLC. As a fiduciary financial advisor, Jeff helps individuals and families in Chandler, Gilbert, Maricopa, and Gold Canyon with retirement, income, investment, and tax planning.

Schedule a complimentary consultation or call (480) 630-6177.

Disclosure: Opinions expressed reflect the author's views as of the date of publication and are subject to change without notice. This material is for informational and educational purposes only and is not a recommendation, an offer or solicitation to buy or sell any security, or personalized investment, tax, or legal advice. Strategies discussed may not be suitable for every investor; consult your own tax and legal professionals before acting. Investing involves risk, including possible loss of principal, and no strategy can guarantee a profit or prevent losses. Past performance is not indicative of future results. Information from third-party sources and linked websites is believed to be reliable but is not guaranteed. This content may not be reproduced without written permission from J. Martin Wealth Management.

Investment advisory services are offered through Tucker Asset Management LLC (CRD #174844), an SEC-registered investment adviser. J. Martin Wealth Management is independent of Tucker Asset Management LLC. Registration does not imply a certain level of skill or training. For more information, including Form ADV and Form CRS, visit adviserinfo.sec.gov/firm/summary/174844 or call (480) 630-6177.