U.S. households are now carrying a staggering amount of debt, having risen to an all-time high of $16.5 trillion, according to a recent study by NerdWallet. This figure indicates that the average American household holds more than $165,000 in debt – a 7.65 percent increase from the previous year. Although student loan debt has decreased slightly, mortgages, auto loans, and overall debt have increased significantly.
The NerdWallet survey also found that credit card balances continue to rise, totaling nearly $460 billion nationwide. The study noted that the average U.S. household owes about $222,000 in mortgages, $17,000 for credit cards, and $29,000 in auto loans – indicating that the financial strain on Americans is increasing as living costs and interest rates rise faster than incomes can keep up with them.
For many Americans struggling with money issues, credit cards often become their lifeline to make up for what their paycheck can’t cover. Such as necessities like food and housing expenses – forcing them into further levels of debt they may not be able to pay off easily or quickly enough without help or support.
The survey also revealed that student loan amounts had decreased incrementally by 0.6 percent over the past year despite being one of the most significant debts people carry on their balance sheets today. However, experts believe this is simply because more individuals are opting to return to school while employed rather than taking out massive loans to finance it upfront – which would otherwise put even more pressure on those already stuck with heavy debt loads.
Alarmingly, however, income levels have only grown 4 percent nationwide since last year, and living costs have skyrocketed 8 percent, thus creating a gap. And forcing individuals to avenues such as borrowing money from family members or utilizing multiple credit cards just to stay afloat financially each month. Both of these come with their risks if not managed properly and responsibly over time.
It’s important for those already carrying substantial levels of debt or considering taking out additional loans to keep up with life’s essential expenses to understand how these decisions will have a long-term effect on their life. And make sure that they won’t be caught in a cycle of never-ending payments due each month, which can ultimately lead down dangerous paths such as bankruptcy or foreclosure if left unaddressed or unmanaged correctly going forward.
