Amidst reports of staggering national debt in America, a record high of almost $16 trillion, are we as American consumers handling our own debt load any better than our government?
The numbers are astounding. According to the Federal Reserve, average US household debt is currently $54,000. A full 30% of that is credit card debt, at just under $16,000, a figure that has almost doubled since 2009. As of July, 56% of consumers carried an unpaid balance in the prior twelve month period, with 26% of consumers accruing higher levels of revolving debt during that same time frame. Almost 15% of American families have debt exceeding 40% of their income. The average combined credit limit per consumer is $19,000. While 76% of all college students have credit cards, 20% of the consumers in that age group claim to already have debt hardship.
The economic downturn and resulting credit crunch have tightened up the traditional lines of credit, sending an increasing number of consumers to alternative lending sources with much higher interest rates, such as payday loan companies and other short term lenders, further compounding the consumer debt crisis.
While a by the numbers look may indicate that consumers are handling things slightly better than the government- our nation’s debt averages out to just over $138,000 per U.S. household- it is quite clear that too many of us are in far over our heads, in danger of drowning. The good news is that there are viable rescue options, but fiscal education and a sound plan are the life vests that must be worn until there is enough leverage to climb back into the boat.