From Time:

The average personal debt for an American adult is around $22,000, a significant decrease from the $29,800 recorded in 2019. Credit card debt and auto loans continue to rise, pushing U.S. household debt to new records. However, despite this, many Americans have reported making progress on paying off their debts. A survey by Northwestern Mutual and the Harris Poll showed that Americans are making moderate progress in reducing their debts, despite persistent inflation and rising interest rates on credit cards. Many survey participants report heading toward financial stability, while others are experiencing the highest levels of debt in their lives.

The average personal debt excluding mortgages for Americans has dropped to $21,800 in 2023, a significant decrease from the $29,800 recorded in 2019. Credit card debt and auto loans continue to rise, contributing to record U.S. household debt in the fourth quarter of 2023. However, nearly half of survey respondents expect to pay off their debt within one to five years, showing that many are making progress on reducing their debts.

Americans are facing uneven circumstances when it comes to personal debt. Research from Northwestern Mutual and the Harris Poll revealed that even though overall personal debt is decreasing, 35% of Americans reported that they’re in the most debt of their lives. Many people say they used their stimulus checks for savings or paying off debt, contributing to the reduction in debt levels. However, U.S. household debt continues to rise due to high interest rates on credit cards and auto loans.

The New York Federal Reserve reports that U.S. household debt grew by $16 billion between April and June of 2023, driven by high interest rates on credit cards and auto loans. Despite this, Americans continue to make progress in reducing their debts. Northwestern Mutual’s study shows that personal debt per individual dropped by $1,525 between 2021 and 2023, despite challenges like inflation and high interest rates.

Northwestern Mutual’s survey revealed that out of 2,740 U.S. adults, an impressive 43% reported that they have the lowest or close to the lowest debt they’ve ever carried. The study also found that the younger generations struggle the most with student loan debt. However, despite this progress, the New York Fed reports that delinquencies related to credit card debt and auto loan debt have been on the rise lately. Taking control of financial planning and spending is essential during this time to stay vigilant and work towards continued declines in debt levels.



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