U.S. household debt increased to an all-time high of $18.8 trillion in the first quarter of 2026, according to the latest data from the Federal Reserve Bank of New York. The figure spans credit cards, mortgages, student loans, and auto loans.

Mortgage balances rose $21 billion in the first quarter of the year to $13.19 trillion, while home equity lines of credit (HELOC) balances grew by $12 billion to $446 billion, and auto loan balances increased by $18 billion to $1.69 trillion.

However, not every category moved higher. Non-housing debt balances declined by $15 billion from the last quarter, pulled down largely by a dip in credit card balances.

Credit card balances fell by $25 billion to $1.25 trillion, according to the report. Credit card debt typically rises near the end of the fourth quarter as consumer spending increases during the holiday shopping season and then pulls back at the start of the year.

Overall delinquency rates were little changed in the first quarter.

Credit card debt falls to $1.25 trillion

Americans owed about $1.25 trillion on their credit cards at the start of the year, a decline from the previous quarter and likely reflecting slower consumer spending after the holiday season.

Still, this decline was relatively modest when compared to increases seen across other debt categories.

“Aggregate household debt levels rose slightly, with modest increases in most debt types offsetting a seasonal decline in credit card balances,” said Daniel Mangrum, research economist at the New York Fed. “Delinquency transition rates were mostly steady, while student loan delinquencies are returning to pre-pandemic levels.”

Despite lower credit card balances, Americans are still feeling the pinch of rising costs — particularly at the gas pump.

The Consumer Price Index for April showed prices were 3.8% higher than a year ago, the largest annual increase in three years, and up 0.6% on a monthly basis, largely due to soaring energy costs.

The national average cost of a gallon of regular gas is $4.504, up 25 cents for the second consecutive week and the highest level since 2022.

Read more: When will gas prices go down? When drivers could finally see relief.

How a balance transfer credit card can help you pay off debt

If you’re looking to make a dent in your credit card debt, a balance transfer credit card could be a smart move.

These cards offer an introductory APR on transferred balances — usually 0% APR for several months after account opening. This means you can transfer your balance to this new card and begin paying it off without accruing any additional interest during that period.

For example, say you have a $10,000 credit card balance, and your current APR is 23% with a minimum payment of about $290 a month. With this minimum payment, it would take you 352 months to pay off your balance, and you will have paid over $18,000 in interest over the course of that time, assuming you only make the minimum payment.

Now, say you opt for a balance transfer card with a 12-month 0% interest period. Even after paying a 3% balance transfer fee, you could save an estimated $3,551.59 in interest and fees and pay off your balance in 45 months.

Read more: The best balance transfer credit cards for May 2026: Don’t pay any interest until 2027

Alternative debt repayment strategies to save on interest

In some instances, you may not want to consider a new credit card — or perhaps your credit score isn’t quite there for a balance transfer approval.

There are still ways you can save on interest as you work to pay down your balance.

• Make more than the minimum payment: If you have the room in your budget, making more than the minimum monthly payment can lower your overall balance quickly and save money on interest over time. Even if you don’t do this every month, every little bit counts.

• Use any windfalls to lower your balance: The tax refund or work bonus that’s coming your way could be the key to lowering your monthly credit card payments and overall interest burden. Before you use it to book your summer vacation or fund a shopping spree, crunch the numbers to see how using your windfall could lower your payment and free up cash in your monthly budget.

• Negotiate a lower APR: Having a strong track record of on-time payments can work to your benefit. It can’t hurt to contact your issuer and see if they can lower your APR, even temporarily, to make your credit card payments more manageable and reduce the amount you pay in interest.