{
  "id": 20205304,
  "title": "US credit card debt hits record $1.29 trillion as debt-free Americans face credit card and loan rejections",
  "url": "https://urgent.news/2026/11/15/us-credit-card-debt-hits-record-1-29-trillion-as-debt-free-americans",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-11-15T17:07:47.000Z",
  "source": {
    "name": "Hindustan Times - World News",
    "slug": "hindustan-times-world-news",
    "url": "https://www.hindustantimes.com/world-news/us-news/us-credit-card-debt-hits-record-1-29-trillion-as-debt-free-americans-face-credit-card-and-loan-rejections-101794761292582.html"
  },
  "original_language": "en",
  "account": "U.S. credit card debt has surpassed the $1.29 trillion mark, yet financially responsible Americans are experiencing difficulties obtaining even basic credit cards and loans. Even individuals with six-figure incomes, substantial savings, and no existing debt are encountering rejection when applying for loans. According to data from the Federal Reserve Bank of New York, the total credit card debt in the U.S. has risen by 67% since early 2021. Simultaneously, millions of Americans who avoid borrowing are encountering challenges in establishing a credit history that banks can utilize to evaluate their financial background. Roughly 25 million American adults have credit files that are either too sparse or outdated to generate a standard credit score, as reported by the Consumer Financial Protection Bureau (CFPB), according to Fox Business. This implies that individuals with minimal or no borrowing history may encounter challenges securing loans, even if they earn well and possess ample savings. Contemporary banking algorithms scrutinize recent credit activity to gauge how consumers manage borrowed funds. Jade Warshaw, co-host of The Ramsey Show, stated that banks are not necessarily penalizing individuals for living debt-free but are not prioritizing them either. She told Fox News Digital that banks generate revenue from customers who utilize their financial products, so those who do not borrow might receive less attention. Credit repair specialist and founder of Micah Abigail LLC, Micah Smith, also asserted that the credit system can disadvantage people who choose to live without debt. She disclosed to Fox News Digital that while avoiding debt is a prudent financial objective, the way credit scores function can render such individuals ineligible for loans. Smith explained that credit scoring algorithms seek activity and aim to ascertain how a person has handled borrowing. She added that a person's income does not directly influence their credit score, meaning an individual earning a high salary may still have a weak credit profile. A 2025 consumer study by PYMNTS Intelligence and the Federal Reserve found that credit-related anxiety and unexpected loan rejections are increasingly impacting households earning over $100,000 annually. This issue is primarily attributed to a limited borrowing history and a shortage of diverse credit accounts, according to Fox Business. These credit issues can significantly affect people's daily lives. Individuals with little or no credit history may struggle to obtain basic credit cards from major banks such as Chase and Capital One. They may also face obstacles when applying for car loans and home loans. However, Smith does not advocate for completely abstaining from credit. She emphasized that while having no debt is a commendable financial goal, lacking a credit history can also present problems, according to Fox Business. Smith explained that people without a credit history may find it challenging to rent homes or interact with housing groups and other organizations. She also stated that running a small business solely with cash is impractical in today's economy. The two experts hold differing opinions on how people should manage their finances. Smith advises using credit cards for minor purchases and paying bills on time to build a credit history. In contrast, Warshaw believes people should avoid loans and concentrate on saving and investing money. Their contrasting viewpoints emerge at a time when U.S. credit card debt has attained a record $1.29 trillion, highlighting the predicament faced by Americans who desire to remain debt-free but still necessitate a credit history to access essential financial services.",
  "summary": "US credit card debt hits $1.29 trillion as debt-free Americans with little credit history face rejections for credit cards, car loans and mortgages.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}