The Federal Reserve Bank of New York recently reported that Total Household Debt rose to $12.58 trillion in 2016, with $226 billion in Q4 alone. This is only 0.8% less than the peak of $12.68 trillion attained during the 2008 U.S. recession. The 2016 fourth quarter debt increase is the largest quarterly increase since the last quarter of 2013.
Credit Card and Student Loan Debt Show Largest Increases
Leading the way of this quarterly increase was credit card debt with student loans not far behind. Credit card balances increased by 4.3% compared to the previous quarter. Student loan balances increased by 2.4%.
Overall, credit card balances increased to $779 billion and student loan debt balances rose to $1.31 trillion. The report also noted that 11.2% of student loan debt was 90 or more days delinquent or in default.
In the past 10 years, the overall U.S. household debt has increased by 11%. Today, the average American household with credit card debt has balances totaling $16,061, and the average household with any kind of debt owes $132,529, including mortgages.
Report Breakdown of Key Debt Balances
Total Owed by Average U.S. Household Total Debt Owed by U.S. Consumers
Credit Cards $ 16,061 $747 billion
Mortgages $ 172,806 $8.35 trillion
Auto Loans $ 28,535 $1.14 trillion
Student Loans $ 49,042 $1.28 trillion
Any Type of Debt $ 132,529 $12.35 trillion
Debt Balances are current as of Q3 2016; figures are updated quarterly by the Federal Reserve.
The report also noted that California, New Jersey, New York, and Arizona had higher household debt per capita than the nation’s average; while Nevada, Illinois, Florida, Pennsylvania, Texas, Michigan, and Ohio had a lower household debt per capita than the U.S. average.
Primary Reasons for Debt Balance Increases and Easily Accessible Solution
Even though most of us strive to live within our means, the precipitous growth of medical and housing costs is surpassing income growth; resulting in more and more people being forced to utilize credit cards and loans to make ends meet.
The good news: No matter how bad your financial situation may be, taking control is still within your grasp. SettleiTsoft® provides free budgetary and debt negotiation tools that will help put you back in charge of your financial life faster than you ever thought possible. Check it out at www.settleitsoft.com .