Are you ‘secretly broke’? Here are the 7 worst habits keeping Americans in the red

Vishesh Raisinghani

Sun, September 20, 2026 at 4:05 PM GMT+3 9 min read

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Being broke and looking broke aren't the same thing. There are plenty of people with fancy job titles, brand new cars in the driveway and an endless penchant for bragging about how much money they have.

But look under the hood, and they're swimming in debt, struggling to stay afloat.

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Nearly two-thirds of American consumers are living paycheck to paycheck in 2026, according to the latest PYMNTS American Paycheck (1) report. As you might expect, that ratio is lower for high-income earners — but not by much.

In fact, roughly 46% of those annually earning more than $150,000 still live paycheck to paycheck.

Simply put, there are millions of "secretly broke" Americans. Here are seven money habits that could put you in the same category.

1. You're frequently financing everything

If you're turning to credit cards or buy now, pay later (BNPL) schemes to bridge the gap between your income and spending, it's potentially a sign of trouble.

It's also a growing trend across the country. Nearly half of those surveyed by consumer advocacy group Protect Borrowers (2) said they used BNPL services to buy basics like groceries. Roughly 42% used it for medical or dental care, and 39% used it for paying utility bills.

Meanwhile, credit card balances have ballooned to $1.26 trillion in the second quarter of 2026, according to the Federal Reserve Bank of New York (3).

When it comes to paying down multiple debts, there are two main strategies — the avalanche and the snowball methods.

The avalanche starts by wiping out your largest debt, which is typically a slow process, while maintaining the others. Then, once the big debt is dealt with, you funnel your funds into each smaller debt in turn. The snowball technique takes the opposite approach by paying off your smaller debts one after another to build up steam.

But managing multiple payments can require a lot of coordination. If you're struggling with a variety of monthly payments on credit card or BNPL debt, consolidating all your debts into a personal loan through Credible can an effective way to get rid of your debt faster.

That way, instead of juggling multiple monthly payments, you'll have one predictable payment to manage each month.

Through Credible's online marketplace, finding the right loan becomes much simpler. Credible lets you comparison-shop for the lowest interest rates with just a few clicks. In less than three minutes, you'll see all the lenders willing to help pay off your credit cards or other debts with a single personal loan.

If you owe a substantial amount, you may also want to see if you qualify for a debt relief program to help clear a significant portion of your debt.

With Freedom Debt Relief, you can speak with a certified debt relief consultant for free, who can show you how much you can save by partnering with them.

If you're eligible, they can negotiate settlements with your creditors until all of your enrolled debt is resolved.

2. You have margin debt

A growing number of investors are betting on stocks with borrowed capital.

"Margin debt is the highest it has ever been," JPMorgan CEO Jamie Dimon told CNBC (4), suggesting that the growing use of leverage could amplify the risks faced by many investors.

"There's a lot of margin debt you don't see because it's not called margin debt. It's called other things," he added. "It's that kind of leverage, some hidden, some public."

In other words, it's always a good idea to look out for margin debt in your own finances — even if it isn't named as such in the fine print.

For instance, an oversized portfolio of leveraged bets on the stock or crypto market could be a sign that you're putting too much of your personal wealth at risk. You could consider rebalancing your portfolio to reduce some of this risk.

3. You're only making minimum payments

As of the first quarters of 2026, nearly 38.7% of credit card borrowers were either paying just the minimum balance or less than the full amount on their bill, according to the Federal Reserve Bank of Philadelphia (5). That's a sign that a significant number of consumers are struggling to meet monthly obligations.

At the same time, more consumers than ever are making the full balance payment on their credit card bills. That shows a significant rift between American consumers.

If you're one of the ones struggling with credit card payments, it could be time to consider other sources of financing. A home equity line of credit (or HELOC), for instance, could unlock cash at relatively attractive interest rates.

AmeriSave offers a flexible HELOC that lets homeowners borrow against their equity as needed during a draw period, making it useful for renovations or debt consolidation. The application is primarily online and available in most states.

It's a revolving line of credit that leverages the equity in your home as collateral, so that you can borrow and repay funds as needed — similar to a credit card.

A HELOC can be a good fit for borrowers who want convenience and flexibility rather than a large lump-sum loan up-front. You can draw funds only when you need them, so it's useful for ongoing or unpredictable costs. Interest is charged only on what you use, and you repay the balance over time.

It's essentially a flexible credit line secured by your home, delivered through a mostly online application process.

4. You're raiding your 401(k) for emergencies

The number of workers taking hardship withdrawals from their 401(k) plans rose from 5% to 6% between 2024 and 2025, according to Vanguard's latest How America Saves (6) report. It's a sign of growing distress across the economy.

If you're considering a hardship withdrawal in 2026, it could be helpful to speak to a professional first to consider alternatives. That's where a platform like Advisor.com comes in, helping you find a qualified and verified financial expert in your area, for free. Plus, their network comprises fiduciaries, who are legally obligated to put your interests first.

Just enter a few details about your finances and goals, and Advisor.com's AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn't always easy — there's no one-size-fits-all solution. That's whyAdvisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they're the right fit for you.

5. Your car payment is over $1,000

Roughly 19% of new car loans in 2026 had monthly payments exceeding $1,000, according to Experian data cited by CNBC (7). It's also worth mentioning that nearly 74% of those loans over $1,000 a month were for "non-luxury models," meaning that it's not necessarily the case that consumers are chasing luxury.

Many of the most popular models in that category were trucks.

In short, rising car prices and auto loan interest rates are putting increasing pressure on consumers. But these excessive payments can be avoided by either buying a used car or putting more equity toward your next purchase.

6. You don't know your total monthly subscriptions

U.S. consumers have an average of 5.2 monthly subscriptions that collectively cost $830 a year, according to bundling service Bango (8).

What's worse, CNET (9) reports that the average American is losing over $250 a year on unused subscriptions in 2026.

If you have no idea what your annual spending on monthly subscriptions is, or what you're actually wasting on unused subscriptions, that could be a sign of trouble. Without a recurring audit of all your monthly plans, you could be throwing away money on plans you no longer need.

7. You have no financial cushion

Nearly 21% of U.S. adults have no emergency savings, and 37% say they couldn't cover an unexpected expense over $400, according to Empower (10).

That's nearly 2 out of 5 Americans who can't afford $400 for an emergency.

Regardless of your income level, if you don't have at least three to six months of living expenses set aside for emergencies, your personal finances could be at risk. Accumulating an emergency fund could arguably be just as important as paying down debt.

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base rate APY of 3.55% through program banks. With a new client boost & direct deposit incentive, referred clients can earn up to a 4.55% APY.

That's 10 times the national deposit savings rate, according to the FDIC's August report.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.

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Article Sources

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PYMNTS.com (); Protect Borrowers (); Federal Reserve Bank of New York (); CNBC (), (); Federal Reserve Bank of Philadelphia (); Vanguard (); Bango (); CNET (); Empower ()

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.