Finance1 min read

As credit card balances hit a record high, medical bills can become 'shadow debt,' expert says

By · Published by Everything Blog

In short

Total U.S. household debt climbed to $19.1 trillion in the third quarter, with credit card balances hitting a record $1.29 trillion. While direct medical debt sits at an estimated $220 billion, significant healthcare costs are obscured as shadow debt when charged to credit cards. Roughly 17% of surveyed households continue to carry balances on cards or loans used specifically to pay for medical care. Furthermore, credit counseling data reveals that medical hardship was the root cause of financial trouble for 20% of one major agency's clients in 2025.

Key points

  • Patients should carefully examine bills for duplicate charges and coding errors before ta…: Patients should carefully examine bills for duplicate charges and coding errors before taking on debt to pay them.
  • Consumers ought to request financial assistance directly from healthcare providers before…: Consumers ought to request financial assistance directly from healthcare providers before accepting options like medical credit cards.
  • Nonprofit hospitals are legally mandated to maintain written financial assistance policie…: Nonprofit hospitals are legally mandated to maintain written financial assistance policies, though they are rarely offered to patients upfront.

Sources checked by our analysis pipeline: 1

Total household debt rose $334 billion in the third quarter, to $19.1 trillion, according to new data from the Federal Reserve Bank of New York. That total doesn't include medical debt — at least, not directly.

An estimated $220 billion in medical debt exists, according to an analysis of 2021 federal survey data by KFF, a national nonprofit healthcare research group. But medical expenses can become hard-to-track "shadow" debt if consumers pay them with a credit card or other forms of borrowing, said Jim Triggs, the CEO of Money Management International, a nonprofit credit counseling organization.

"Technically, as soon as that consumer pays that debt off with another mechanism, now it becomes credit card debt, or housing debt, or whatever mechanism you used to pay it off," Triggs said.

He said 20% of MMI's debt and budget counseling clients in 2025 cited a medical hardship as the reason they went into debt.

Separately, about 17% of households surveyed in 2024 reported still owing money on a loan or credit card used to pay a medical bill, according to a 2025…

Finance