U.S. Consumer Credit Hits $5 Trillion—But It's Not What It Looks Like

America's consumer credit has just surpassed $5 trillion for the first time ever. Sounds like economic strength? Think again.

What's really happening underneath:

This isn't discretionary spending power. It's survival mode borrowing. Households are tapping credit lines just to cover the essentials—groceries, monthly rent, mounting medical expenses, credit card minimums, and those restarting student loan payments. The math doesn't add up anymore without debt.

Meanwhile, personal savings rates have collapsed to near-record lows. When people max out their reserves and still need to borrow just to keep up with basic costs, that's a signal of economic strain, not strength.

For crypto and broader markets, this macroeconomic backdrop matters. Consumer debt cycles often precede major shifts in risk appetite and liquidity conditions. When household finances tighten this severely, it tends to reshape investment behavior and market dynamics across all asset classes.