Trump’s Chaos Economy Could Trigger a Debt Crisis

Americans are struggling to repay their student and car loans, mortgages, credit card bills, and even “buy now, pay later”—an avalanche of debt that could bury the entire economy.

Lending Tree, an online lender, reported last week that nearly half of U.S. households that used “buy now, pay later”—loans offered at online store checkouts by companies like Affirm and Klarna—had been late on their monthly payment over the past year. That’s up from the 41 percent who paid late the year before, but more importantly it was the latest in a series of worrisome news about how many families are falling behind on all kinds of debt. And that’s not just a problem for those families but a collective warning sign for the entire U.S. economy.

In March, the Century Foundation found that half of credit card holders weren’t able to pay their balances every month, and together carry $1 trillion in credit card debt. As of last October, which marked two years since the expiration of the Biden-era pause on federal student loan repayments, 11 percent of borrowers had fallen three or more months behind, according to a FICO Credit Score report released a month ago. And borrowers are also behind on auto loan and mortgage payments, after losing the breathing room they got from Covid-era payment programs.

Are we on the verge of a debt crisis? What the data shows for certain is that families have been struggling for some time to keep up, and it’s going to get harder for them to do so, especially under President Donald Trump. “Finances are brittle,” said Mike Pierce, a co-author of the Century Foundation report and the executive director and co-founder of Protect Borrowers, a borrower advocacy organization. “[Families] feel like they’re operating without a net. And you actually do see........

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