Consumer Debt Is Manageable, but By Whose Standards?

In May 2026, Ted Rossman of Yahoo Finance wrote that, in the second quarter of 2026, consumer debt is still manageable. While the author deserves credit for not catastrophizing, and the website deserves credit for a headline that qualifies as benign clickbait, the article’s premise, namely that American consumers’ financial situation is not so bad, resonates more with economists than it does with consumers. Economists are the ones who never want to retire because their work is so much fun. They also tell you that you should put the extra $30 in your monthly budget toward your $5,000 credit card debt, instead of toward the $400 medical bill that you are paying in installments, because the credit card has a higher interest rate, even though, you would prefer to pay it toward the medical bill because, if you do this, then in six months’ time, it will be paid off, and you can celebrate that accomplishment. Rossman’s article has some good news about the economy, namely that unemployment rates are low and that we are not seeing a spike in defaults on debts. Meanwhile, the only reason economists are not alarmed that most people are living paycheck to paycheck is that it has been going on for so long that economists are used to it. If your financial situation doesn’t look terribly disturbing on paper, but it is stressing you out, contact a Boca Raton debt lawyer.

Good News for Homeowners, but Bad News for Everyone Else

The economy has gone through plenty of hairpin turns since the early days of the COVID-19 pandemic, but one thing that has remained constant is that, if you own your home, you are in a stronger financial position. Mortgage debt has increased in the past five years, but that is because of the increase in housing prices. People who were able to qualify for mortgages have been paying them down. Because of this, plus the appreciation in real estate values, home equity is at an all-time high. The better news is that homeowners are not turning to home equity lines of credit as much as they were doing a few years ago.

The bad news is that, if you rent your primary residence, you are treading water. Almost all other kinds of consumer debts are at nearly record highs. This includes credit car debt and auto loans.

Where Does This Leave You?

If you are spending all your money on rent and other bills and debt repayments, you might feel like you are getting nowhere. Credit card balance transfers and debt consolidation loans might enable you to pay off your debt for less money overall. Likewise, if you enroll in a rent reporting app, your rent payments can boost your credit score in a way that most tenants’ rent payments do not.

Work With a Debt Lawyer About Doing More Than Just Treading Water

A South Florida debt lawyer can help you pay down your debts and improve your credit score.  Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.

Source:

finance.yahoo.com/economy/articles/consumer-debt-still-seems-manageable-120100852.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAJ0zZEGAwA8zrcUZhwIY-8gVwtTh0eih24LpDmbFZe0Dt2KCzptz_e1hW63T_bCuz5Ybs5Cw8rQldLCaR4I1XWOJK6L2ugXBDnHZz5ZrB3Qr3TW4SrEUDBzFi_mGlk1kGgs-8P4gVkUQeQdkPKgRFn6c2Uf8Zk_Y7GNaB8QSRANW