alarming debt facts

1. The total household debt in America is 17.05 trillion.

The total household debt rose by $148 billion in the first quarter of 2023 alone. Since the end of 2019 (COVID-19), the debt increase by 2.9 trillion.

2. In 1Q 2023, over 102,000 consumers had a bankruptcy added to their credit report.

While credit reporting regulations have restricted third parties reporting delinquencies to the credit bureaus, the number remains high and is up 2000 from the previous quarter.

3. The value of outstanding student loan debt sits at $1.604 trillion.

President Biden’s most recent plan is set to cancel $39 billion in student loan debt. Without looking at the bigger picture, one may think $39 billion is a substantial amount, but it is less than 2.5% of the total student loan debt. The student loan forgiveness plan outlined by the president is also facing another lawsuit.

4. Total value of all new mortgages on consumer credit reports for 1Q 2023 is 324 billion.

That total represents a sharp drop from the previous quarter and is the lowest seen since 2014. Alarming? Yes. Surprising? Absolutely not considering mortgage interest rates and home prices today.

5. The average American household has around $10K in credit card debt.

6. 15% of Americans Have Been in Credit Card Debt for more than 15 Years

7. The Average debt for a credit card holder with an unpaid balance is $7279

8. The Average Interest Rate on a Credit Card as of May 2023 is 22%.

As inflation remains high, there is very little chance we’ll see noticeably lower credit card interest rates anytime soon. We haven’t seen similar numbers this high in decades. With interest rates being lowered since the last reporting period, there is a chance we might see a slight decrease in credit card interest rates.

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9. The Personal Savings Rate is at 4.3%.

The Personal Savings Rate is calculated by subtracting taxes and personal outlays (spending) from your gross pay. The current savings rate will need to increase by roughly 100% to reach the annual national average spending rate of 8%.

10. Recent college graduates overestimate their starting salary by $30,000

11. 56% of all Americans carry a credit card balance

12. 24% of consumers have no savings set aside for emergencies

13. 39% of consumers have less than a month of income saved for emergencies.

14. People expect to die in debt.

It has become increasingly common for people to die with debt to their name. Around 73% of Americans are expected to be in debt until the day they die.

15. The average federal student loan debt balance is $37,717

16. Auto loans account for 9% of all household debt

17. Outstanding Payday loans debt reached $500 billion in Q1 2023, a 13.78% year over year.

18. Around 60% of Americans plan to rely on Social Security as their main source of income in retirement.

19. 43% of nonretired Americans don’t believe they’ll have enough money to ever retire.

20. A survey found that medical debt was a factor in 70% of foreclosures.

21. Medical debt has the biggest mental impact on Americans.

According to The Motley Fool, only 64% of people with medical debt express satisfaction with their current lives. Compared to individuals with other types of debt, it seems owing medical bills have the biggest mental impact.

22. Resident of Connecticut hold the highest average credit card debt.

The average credit card debt in Connecticut is $9.408 New York is trailing closely in second place with the average credit card being $9,165.

23. 40% of consumers with no emergency savings have debt 60 or more days past due.

24. There are more two times as many payday lenders than McDonald’s.

It may surprise you to find out that there are actually more payday loan centers than Mickey D’s in the U.S. That means there are more than 14,000 payday loan storefronts in the country.

25. In 3Q 2022, the Treasury Department paid a record $213 billion in interest payments on the national debt.

Final Thoughts on Debt in America

How do we break this debt cycle? The best answer I can provide is through education and utilization of efficient resources. If more Americans are better educated earlier on in life about personal finance, money management, and debt they will be better equipped to deal with it as adults. Give the kids a head starts with these 3 book recommendations:

Discipline is also a vital part of reduction. It cultivates consistent payments, curbs impulsive spending, and maintains focus on long-term goals, ensuring a steady path towards financial freedom and peace of mind. Check out out review of Self Inc; a great way to build savings while improving your credit scores. The average user sees their credit score increase by 49 points.

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