Money

How Does Your Debt Stack Up to the Rest of Americans?

Americans have slowly been making a financial comeback since the recession, but how is the personal finance climate now compared to to 2008? Surprisingly, when it comes to debt, the outlook isn’t that much different overall.

According to the Federal Reserve, revolving consumer credit rose to $1 trillion dollars in February 2017. They also projected that total household debt will be $12.68 trillion in 2017, which is what the debt was in the third quarter of 2008, according to MarketWatch.

However, the surprising part of these new numbers is how this debt is allocated. While 67 percent of debt is comprised of mortgage lending, people are borrowing more and more money for student loans and auto loans. In fact, home loans are $1 trillion less than they were in 2008, meanwhile, auto loans are up $367 billion. The kicker is student loans though, which have shot up $671 billion since 2008.

So, how does your debt stack up to what the majority of Americans’ looks like?

With mortgages making up the majority of debt (67 percent), the next big expense is student loans, which comes in at 10 percent of overall debt. That figure is closely followed by auto debt at 9 percent. This leaves credit card debt at 6 percent, and other debt at 3 percent. Is it a similar situation with your own debt?

It’s also interesting that student loan debt has nearly doubled since the recession began, likely because people realized that getting at least a bachelor’s degree is important for professional progress. Even more interesting is how student loan debt was barely approaching 3 percent of overall debt back in 2003, before the housing crisis. This shows that over time, consumers have placed a greater emphasis on higher education, even if that means racking up more debt in the meantime.

These figures also show that consumers are being responsible spenders, since the biggest areas of debt are large purchases like homes and cars, as opposed to simple credit card debt.

Previous studies have shown Americans struggle with their auto loans, which often have high rates.  Delinquent subprime auto loans that have hit their highest level since 2010. At that time, nearly 6 million people were at least 90 days late on their payments. That is similar consumer behavior to what was seen just before the last recession.

It will be interesting to see how these trends continue as college becomes either more expensive or more affordable, and as people begin to seek education options beyond simply having an undergraduate degree.

Disclosure: The information provided by The Financial Genie is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. The Financial Genie does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. Additionally, some of the organizations with products on our site may pay us a referral fee or affiliate commission when you click to apply for those products.

Leave a Comment