Average U.S. Household Debt – The Numbers May Astound You

Staggering U.S. Household Debt

According to a 2015 American household credit card debt study, “the average U.S. household with debt carries $15,762 in credit card debt and $130,922 in total debt.” Erin El Issa, 2015 American Household Credit Card Debt Study, NerdWallet, Inc., (last visited May 10, 2016). To breakdown these figures, a typical United States household owes about $15,762 in credit cards, $168,614 in mortgages, $27,141 in auto loans, and $48,172 in student loans. Id. Even more startling is that “the average household is paying a total of $6,658 in interest per year.” Id. (emphasis added). To put this in perspective, this interest “is 9% of the average household income ($75,591).” Id. (emphasis added). Not only are these figures exorbitantly high, but they are also terrifying for families trying to survive in a debt driven society.

American Household Debt is Growing

The study articulates several suggested explanations to account for these high household debts. Id. One explanation may be because “the rise in the cost of living has outpaced income growth over the past 12 years.” Id. For instance, while median household income has grown 26% since 2003, medical costs have grown by 51% and food and beverage prices have increased by 37%. Id. This disparity between the level of income and cost of living may be directly correlated to these high household debts.

Another explanation may be because “consumers vastly underestimate or under-report how much debt they have.” Id. In fact, “as of 2013, actual lender-reported credit card debt was 155% greater than borrower-reported balances.” Id. While a majority of this under-reporting may stem from true lack of knowledge, a portion may result from the stigma that still surrounds credit card debt to this day. Id. However, this stigma must be confronted head on to prevent falling prey to these overwhelming debts.

Regardless, whatever the reasons, you – the consumer – must take a stand to protect yourself. The first place to start is to review a copy of your credit report. We recommend that you go to www.annualcreditreport.com to do so, as it is quick, easy, and free. Once you have a copy of your credit report, educate yourself by reviewing every single item listed. This is your financial profile, so you can never be too safe. Oftentimes, there may even be errors on your credit report holding you back from reaching your financial goals, so a thorough review is key.

Upon review, you can prepare a personal savings plan for yourself to abide by. For instance, you could devise a more aggressive payment plan for your Chase credit card to pay it off sooner than later or simply decide that buying a new vehicle is not a good decision for you right now. Either way, knowledge is power, so take the time today to educate yourself and plan for financial peace.

Not only is it possible, but the tools to do so are right at your fingertips, starting with McCarthy Law PLC. Among other things, McCarthy Law PLC negotiates directly with your creditors to significantly reduce your debts, as well as aggressively fights to remove errors listed on your credit report. We are here to assist you however we possibly can. Be proactive – not a statistic! Call us today at (855) 976-5777 for a free consultation.

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Kevin Fallon McCarthy

Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.