The American Dream is slipping through the fingers of the middle class, and it’s not just the poorest households feeling the squeeze. Here’s the shocking truth: even highly educated, wealthier Americans are drowning in credit card debt as the cost of living crisis spirals out of control. But here’s where it gets controversial—could this be the Achilles’ heel of the Trump presidency? Let’s dive in.
According to the American Consumer Credit Counseling (ACCC), a leading charity offering debt advice, the share of debt-struggling individuals with a four-year university degree or a master’s has skyrocketed from 34% in 2021 to 43% this year. Kenneth Mohammed, a representative from the ACCC, warns that credit card debt is no longer just a problem for low-income families—it’s now a growing burden for educated, middle-class Americans too. This trend is sounding alarm bells in the White House, as fears grow that the cost of living crisis could derail President Trump’s promises to stabilize the economy.
During his election campaign, Trump vowed to tackle rising prices from ‘day one.’ Yet, high housing costs and the lingering effects of post-pandemic spending sprees are forcing many to live beyond their means. The ACCC reports that calls for help surged to 61,000 in the first 11 months of the year—an 11% increase compared to 2024 and the highest since records began in 2015. Shockingly, about three in four callers are employed, but their incomes simply aren’t enough to cover their expenses. This is despite the average household income of struggling families jumping from $55,000 to $76,000.
And this is the part most people miss: even though inflation has cooled from a 40-year high of 9.1% in June 2022 to 2.7% in November, the problem persists. Mohammed explains, ‘Inflation has slowed, but consumers have been financing it all along by relying on credit card debt to stay afloat. Eventually, you hit a breaking point where you can’t borrow any more.’ He adds, ‘Most people calling us today have been struggling for three or four years, living paycheck to paycheck, and they see no end in sight.’
President Trump has highlighted falling prices on items like eggs and Thanksgiving turkeys as proof that cost pressures are easing. He’s also proposed a $2,000 ‘tariff dividend’ cheque for low-income households. But here’s the catch: slower inflation isn’t the same as price drops, and Trump’s approval ratings are plummeting. According to AP-Norc polling, the share of Americans who approve of his handling of the economy dropped from 40% in March to 31% in December. Even among Republican voters, support has fallen from 78% to 69%.
Torsten Slok, chief economist at Apollo Global Management, warns that if middle-class households continue to struggle, it could spell trouble for the entire U.S. economy. Why? Because the middle class drives a significant portion of consumer spending. While the poorest fifth of households account for just 8% of spending, the richest fifth contribute 40%. However, if the middle two-fifths of earners face financial strain, it creates a much larger drag on the economy. Slok notes, ‘We’re talking about 60% of the population, and their spending is crucial. Once their struggles become substantial, even the richest households won’t be enough to offset the negative effects.’
The data is grim: the share of Americans seriously behind on credit card debt hit a 15-year high this year, and subprime car loan delinquencies are at record levels. Student loan defaults have also soared, with 14.26% of borrowers missing more than 90 days of payments—up from 9.21% before the pandemic. These trends signal that cost pressures are increasingly affecting the middle class, who are more likely to hold university degrees.
But here’s the question: Is this a temporary setback or a sign of deeper systemic issues? Could Trump’s policies truly alleviate this crisis, or are they merely band-aid solutions? Share your thoughts in the comments—let’s spark a conversation about the future of the American middle class and the economy at large.
