Medical bills hide inside record $1.29 trillion card debt
As Americans' credit card balances hit a record $1.29 trillion, medical bills moved onto cards and loans are becoming 'shadow debt' that is harder to see, and harder to pay off.
Record balances, hidden bills
Americans' credit card balances reached a record $1.29 trillion in the third quarter, rising by $22 billion from the prior quarter, according to the Federal Reserve Bank of New York. Total household debt climbed to a record $19.1 trillion, up $334 billion over the same period.
Inside those totals, medical bills are quietly piling up. When a hospital bill moves onto a credit card or a personal loan, it stops looking like medical debt and starts looking like ordinary borrowing, making the strain harder to track. Jim Triggs, chief executive of nonprofit credit counselor Money Management International, described this migration as medical expenses becoming "shadow" debt, CNBC reported.
How medical debt hides
About 17% of households surveyed in 2024 still owed money on a loan or credit card used to cover a medical bill, according to a 2025 study by researchers at the Consumer Financial Protection Bureau. The borrowing often starts at the hospital billing desk, where patients are offered payment plans or told to put the balance on a card.
Triggs said 20% of his organization's debt and budget counseling clients in 2025 cited medical hardship as the reason they entered debt. KFF separately estimated medical debt at $220 billion using 2021 federal survey data, a figure that is not a current tally of the medical expenses now embedded in credit cards and other loans.
- Credit card balances$1.29 trillion, a record
- Total household debt$19.1 trillion
- Households owing on medical borrowing17%
- Americans with debt in collectionsAbout 24%
- Medical debt in collections (median)$1,492
The strain in the numbers
New analysis from the Urban Institute, based on U.S. Census and credit bureau data, found that roughly 24% of Americans with a credit record have debt in collections, with a median balance of about $2,900. About 3% of Americans have medical debt in collections, with a median balance of $1,492.
The New York Fed reported that 5% of all household debt is now in some stage of delinquency, or 1 in every 20 dollars owed. Ted Rossman, principal consumer finance analyst at Money Management International, said: "Medical bills, car repairs, home repairs and day-to-day essentials are among the most common stories we hear from clients." Consumer prices have risen about 30% since 2019, Rossman noted, forcing many families to finance daily expenses with debt.
What consumers can check
Before financing care, consumers can ask for an itemized bill and check it against what insurance covered, CNBC reported. Hospitals often have financial assistance programs and interest-free payment plans that are cheaper than carrying a balance on a card, where interest compounds month after month.
The other check is the credit report itself. Medical debt that moves onto a card no longer shows up as a medical bill, so the true cost of care can be easy to miss until the balance grows. Knowing where the debt came from is the first step to choosing the cheapest way to pay it down.
