A recent survey and study by GOBankingRates addresses the current debt of “the average American.” The debt study results indicate that household debt is on the rise after dropping during the Great Recession (2008 – 2012).
GOBankingRates was launched in 2004 to offer consumers competitive interest rates on financial products in conjunction with informative personal finance content, news and tools.
Published October 23 and written by “Life and Money” columnist Cameron Huddeston, the data was compiled after GOBankingRates surveyed more than 2,500 adults across the U.S. with six questions:
- How much debt do you currently have?
- How much mortgage debt do you currently have?
- How much credit card debt do you currently have?
- How much student loan debt do you currently have?
- How much auto loan debt do you currently have?
- How much medical debt do you currently have?
“After declining during the aftermath of the Great Recession,” stated Huddleston, “household debt balances have risen over the past several years to nearly $13 trillion in the second quarter of 2017, according to the Federal Reserve Bank of New York.”
Debt Study Results: Debt Type
The survey shows that the number of Americans with debt varies greatly — “from a high of 65 percent with mortgage debt to a low of 21 percent with medical debt.” Meanwhile, the average debt is approximately $63,000 for all those surveyed (including debt-free individuals) while the average total amount owed is $140,113 (for those with debt).
One analyst said the average balance isn’t so extreme given that it includes home loans, and that some respondents may have been “too embarrassed to admit that they have debt because they don’t want to appear financially irresponsible.”
The Federal Reserve Bank of New York states that mortgage debt is currently the largest component of household debt in the U.S. According to the author, respondents with mortgage debt between “$150,000 and $200,000” was the largest group with those owing “less than $100,000” placing second.
The survey revealed that 50 percent of respondents have credit card debt, the second-most-common type of debt after mortgage debt. “Less than $500” in credit card debt was the most common response while “more than $10,000” was the least common.
In the realm of education, 25 percent said they owe money for student loans. “Among those who have student loan debt, the most common amount respondents claim to owe is ‘less than $1,000,’ followed by ‘$10,000 to $20,000’ and ‘$20,000 to $50,000,’” stated the results.
Furthermore, 32 percent of respondents indicated having car debt while only 21 percent have medical debt.
Debt Study Results: Demographics
Debt is split nearly down the middle of the genders, but American men own three times as much as women: $95,057 versus $31,037. Researchers attribute the gap to potential business-related debt and higher mortgages among men.
The survey also indicated that adults 45 – 54 in age (Generation X) have the highest average amount of debt ($130,656) while those between 18 and 24 (young Millennials) owe $18,145.
Also, “the older Gen Xer (ages 45 to 54) and baby boomer (ages 55 to 65) age groups have the highest percentage of respondents with mortgage loan debt in our survey: 100 percent” while only 16 percent of young Millennials are paying on homes.
In the credit card space, older Gen Xers lead the pack of debtors, followed by Boomers and in last place, young Millennials (63 percent in this group have no credit card debt).
For auto loans, young Gen Xers (ages 35 to 44) were the highest percentage of respondents having auto debt (40 percent) while only 22 percent of adults 65 and older, and 21 percent of young millennials said they have car loans.
As might be expected, 37 percent of adults ages 25 to 34 (older millennials) say they are paying on student loans (the highest percentage) followed by those aged 35 – 44 (33 percent). Individuals 65 and older have the lowest percentage education debt at 11 percent.
Surprisingly, the study shows that “the 65-and-older age group has the highest percentage of respondents who said they don’t have medical debt (84 percent) while “82 percent of young adults ages 18 to 24 also said they don’t have medical debt.”
Vincia Gordon, a client services manager for Guidewell Financial Solutions, believes the low numbers for seniors and boomers could be the result of them using credit cards to pay medical bills and thus, “aren’t thinking of that credit card debt as medical debt.”
Organizations Concerned about the Debt Study Results
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