It's Your Debt
Living with Debt
There are no limits on how long it takes to pay debt back. Creditors take advantage of this by charging minimum payments that are so low they not only lure you into borrowing more but can take up to 35 years to repay!
Credit Card Debt
You see, getting into credit card debt, with the deck stacked against you, is much like riding a bike downhill. Then, when you are maxed out, it feels like peddling uphill to the same place you just came from.
PayDay Loans
We have all experienced some kind of financial struggle during our lives. The challenge is that once you take payday loan you are paying back over 500% in interest and sometimes more for over 2 years. End result is you paid back your loan several times over and just throwing money away.
THings In COllections
Getting threatening calls and mail on a regular basis can take its toll on even the strongest person. While working yourself to the bone with no end in site they keep calling and sending letters until it goes to court. Wage garnishments and liens on assets can be a huge unwanted challenge to anyone.
Average Consumer Debt
Need a little money to get by due to a change in financial status? Did you not rebound the way you planned it out?
Type of debt Average debt in 2021
Credit card $5,221
Personal loan $17,064
Auto loan $20,987
Student loan $39,487
HELOC $39,556
Mortgage $220,380
Consumer Debt Relief
Average American debt
Credit Card Debt
There’s a lot to like about credit cards: They help you build credit, quickly pay for purchases and earn rewards. While credit card balances didn’t fall as much as they did in the previous year (14%), Experian found that average consumer credit card balances went down by 1.8% in 2021. The average U.S. consumer had $5,221 in credit card debt in 2021.
Carrying a credit card balance is never a great idea because of accruing interest charges, but credit card balances overall are moving in the right direction. This type of debt saw the largest drop from 2019 to 2020, with the average debt in America for credit cards decreasing by 14 percent, but it’s still continuing in a downward direction.
The decrease in credit card debt is likely due to multiple factors. One of the main contributing factors is that consumers have been able to pay down their debts using relief programs or stimulus payments.
Personal Loan Debt
Personal loans allow you to borrow a lump sum of money and pay it back in installments over time. Consumers can use the funds to cover nearly any expense, from debt consolidation to home improvements and emergency expenses.
Nearly a quarter of U.S. adults have this type of debt, and personal loan average American debt stands at $17,064. This amount represents a slight growth from the previous year, but borrowers continue to be careful as they wait to see how the economy recovers from the pandemic.
Auto Loan Debt
Most car shoppers don’t have the cash to pay for a vehicle upfront, so they take out an auto loan and pay down the balance over time. As the second-most popular type of credit, two-thirds of U.S. adults have at least one auto loan. The average debt in America for car loans is $20,987, increasing by 6.7 percent from 2020. This increase is a reflection of auto price increases throughout the country.
Student Loan Debt
Student Loans help millions of Americans pay for higher education every year. The average balance for this type of debt was $39,487 in 2021, representing just a 1.8 percent increase from 2020. The continued pause on interest payments due to the coronavirus pandemic is the main contributor to slower growth in this debt type. The current interest rate pause is set to expire on December 31, 2022, which may impact Americans’ student loan debt averages.
Heloc Debt
Home equity lines of credit (HELOCs) allow homeowners to borrow money using their homes as collateral. The average American debt for HELOCs is $39.556, decreasing by 5.7 percent from 2020. Americans paid off the balances and abstained from taking out new HELOCs this year, contributing to the decrease. As interest rates increase, Americans may wait to see how the housing market reacts before relying on their home equity to fund projects or major renovations.
Mortgage Debt
When it comes to how much debt the average American has, mortgages represent the largest outstanding debt in the U.S. The average mortgage balance stands at $220,380.
This 5.9 percent increase in the mortgage balance average is partly due to increasing real estate prices. However, due to record low interest rates, there was also an incredibly hot refinance market, with a 33 percent increase in refinances in just the first half of 2021.
Throughout 2022, interest rates have increased, and the housing market has already begun to cool in many areas. These changes may impact mortgage debt over the next year.
The bottom line
From 2021 through 2022 so far, Americans are still financially recovering from the coronavirus pandemic. Increased interest rates and inflation are contributing to uncertainty in the economy. Slowed growth in most types of debt shows that Americans are careful with their money as they wait to see what will happen with a change housing market and an uncertain economy.
No matter what happens, it’s always a good idea to stay on top of your debt. If you don’t already have a plan for managing your debt, make a plan to speak to a credit adviser. They may be able to help you before sending a debt to collections or worse getting a judgement and having your wages garnished or a lien on any of your assets.
