Welcome to Trump’s America, The i Paper’s World Insight series presenting the sharpest, deepest thinking on an era-defining shift in history and politics, investigating how Donald Trump and his administration have changed the US and the world – and where we go from here.

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At an American checkout, the invitation to borrow money arrives before the receipt. Online, payment platforms divides purchases into instalments or offers a buy now pay later format, while shop-floor promotions push store cards, with some offering free interest for a year.

In the US, shopping bags still look reassuringly full. Behind them, however, sits a household debt pile, including mortgages, of almost $18.8trn (£13.9trn), $383bn (£283bn) more than a year earlier.

The American consumer has kept the tills ringing despite rising prices and uncertainty over global trade and conflict. Retail and food service sales in July were 5 per cent higher than a year earlier, although they slipped 0.6 per cent from June. Higher prices explain part of the annual rise, but not all: inflation-adjusted spending on goods was 1.3 per cent above July last year and 26 per cent above July 2019, while real spending on clothing and footwear was 3.5 per cent higher than a year earlier.

At the same time, just 3 per cent of disposable income was saved in July 2026, compared with 6.8 per cent in July 2019. For some households, existing reserves are shrinking too. A February 2026 survey for Deposit Accounts found that 29 per cent of respondents had less in savings than a year earlier, while Federal Reserve research found that almost one in five adults who had struggled to pay their bills in the previous month had drawn on savings or retirement funds. Families are using reserves intended to protect them against the next unexpected bill simply to meet existing expenses.

Emily, a 38-year-old medical receptionist in Columbus, Ohio, and her husband, a warehouse supervisor, take home around $6,300 (£4,660) a month, work full-time and clear their card every month. Yet their accessible savings have fallen from $14,800 (£10,950) to $3,000 (£2,219) in a year. Medical bills took $4,300 (£3,181), car repairs another $2,500 (£1,849) and gaps in the household budget a further $5,000 (£3,699). The couple, who have two young children, cancelled a holiday and postponed saving for a house deposit. “If you looked only at our payment history, you wouldn’t see the problem,” Emily says. “You would have to look at the savings account as well.”

The unhealthy truth about the US economy

Patrick Reid, a currency expert and visiting lecturer at the University of Cambridge, and Janu Chan, a senior economist formerly at Westpac, see evidence of “a strong US economy overall”, but “not necessarily a healthy one”. Rising share prices benefit households that own investments, while others have far less to fall back on.

Credit card balances rose by $21bn (£15.5bn) in the second quarter of 2026 to $1.26trn (£930bn), while car loans reached $1.71trn (£1.27trn). For households carrying a card balance, the meter runs quickly. The average rate on accounts charged interest was 22.15 per cent, turning a convenient payment method into another monthly bill that can take years to clear.

Americans, Reid and Chan argue, are not unusually dependent on credit, the rest of the world is too, but the problem is instead the price and distribution of that debt. Mortgages account for almost $13.1trn (£9.69trn) of the total, much of it held by homeowners protected by long-term fixed rates. Credit cards represent a smaller share, but their high interest rates can make relatively modest borrowing difficult to escape.

For Daniel, a 31-year-old hotel receptionist sharing a flat in Tampa, Florida, that reserve has disappeared. Reduced overtime has cut his monthly take-home pay from $3,700 (£2,737) to $3,200 (£2,367), while his card balances have risen from $7,800 (£5,771) to $11,900 (£8,804) in a year. Of the $450 (£332) he tries to repay each month, roughly $270 (£200) goes on interest, with the two cards charging around 25 and 28 per cent. Groceries or petrol bought on credit undo much of his progress; even $120 (£89) work shoes were divided into four online payments. “What wears me down is making a payment and then needing the card again before the next payday,” he says. He has postponed renting alone and booked a debt-counselling appointment.

Consequences of another crash

Reid and Chan do not regard consumer debt as the most likely source of another crash. Their concern is what happens when households have less capacity to absorb a setback, or when the wealth supporting spending stops growing. “If savings are being drawn down then household spending will weaken,” they say. “If the stock market falters that would mean a risk that we will see consumer spending weaken too and flow on to businesses and jobs.”

The consequences would extend beyond people buying fewer things. Businesses facing weaker sales may reduce staff hours or jobs, leaving other households with less income and reinforcing the slowdown. Families with little emergency savings would have fewer ways to manage an unexpected bill or lost earnings without borrowing, missing payments or going without.

In the first quarter of 2026, required household debt payments consumed about 11.2 per cent of disposable income, well below their pre-financial crisis peak. That offers some reassurance about the national position, although it says little about the households under the greatest pressure. Reid and Chan also warn that Trump’s tariffs can make imported goods more expensive, while tax reductions improve the finances of some households more than others, potentially widening the divide.

The absence of a national crash would offer little reassurance to a family whose savings have disappeared or whose repayments leave too little for the month ahead. America’s consumers are still keeping tills ringing, restaurant tables occupied and delivery vans moving. The question is how long that picture can remain one of confidence when some families are running down their savings and more of tomorrow’s income has already been promised to today’s bills.