Medical debt.
Household debt can be a useful servant at times but a demanding master if it gets out of control.
“Another year is in the books, and the latest data from the Federal Reserve shows that we set yet another new record for household debt -- in absolute terms, at least,” WalletHub editor John Kiernan said. “When you adjust for inflation, total debt is still around $800 billion below the all-time high. But even though inflation provides a bit of a silver lining in the context of current debt levels, it’s also making the problem harder to solve.”
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These are the key findings from WalletHub’s household debt survey:
- Health problems because of debt. Nearly 1 in 3 Americans believe their household debt is affecting their health.
- Households are struggling to keep up. Nearly 40% of Americans say their household is struggling with debt.
- More debt ahead. Almost 1 in 5 people expect their household debt to increase in the next 12 months.
- Credit card debt is the biggest burden. Forty-five percent of American households struggle the most with credit card debt, followed by mortgages (22%) and student loans (19%).
- Keys to debt reduction. Forty-five percent of Americans believe lower inflation will help reduce their household debt the most, while 20% believe better budgeting is more effective and 17% point to the need for lower interest rates.
- Concern for kids future. More than one-fourth of people are worried about how their debt will affect their kids.
- Rising debt. Forty-two percent say their household has more debt than it did 12 months ago.
- Recession worries. Four in 10 say their household finances are not recession-proof.
- Out of control. Ten percent believe their household debt is out of control.
- Wanting more. Twenty percent say they would borrow more if they could.
“WalletHub’s new Household Debt Survey shows that 45% of people believe lower inflation is the key to getting out of debt, and it’s proving very difficult for the Fed to get inflation under control,” Kiernan said. “Add a trade war to the mix, and we’re looking at a painfully expensive year ahead. Unfortunately, high debt levels not only affect our wallets, but nearly 1 in 3 people also report that their debt is affecting their health, which makes dealing with your finances even more important.”
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
