Most of us are enjoying the benefits of a very robust economy simply for the reasons that the increased liquidity and revenue provide us with additional choices to make, especially when it comes to spending. Either way, whether in the strong economy or in a contracted economy, spending is going to be a part of life. The question remains: Is the American public willing to make the quality choices as it affects this spending that this improving economy provides for them? Thus far, it appears to be No. But that can change.
When the economy contracts, we are not as flexible to cut down on costs because of the limited amount of disposable income. Right now, Americans are taking on debt in the form of mortgages, student loans, cars and credit cards. That doesn’t leave out medical debts, personal loans, home improvement loans and just general surprises.
Experian put out a report recently titled 2017 State of Credit. The findings in this report are not exactly startling but they are significant enough to provoke us to make some significant and substantive changes in the way that we handle our money and handle our debt.
Experian report states that:
The average mortgage was $202,000.
The average non-mortgage debt per household was $24,706.
The average student loan balance was $34,144; this is a new record.
The average balance on credit cards was $6,354. The average credit card debt jumped by 2.7% over the course of 2017. Generation X and Millennials saw the largest percentage increases. It indicates that these generations are becoming a little too comfortable with owing a lot of money.
The average balance on retail credit cards was $1,841. This represents a 4% increase over the course of the year.
Debt in America hit an all-time high of $1.02 trillion in June 2017.