Americans facing record $17 trillion household debt
PHOENIX (3TV/CBS 5) - Household debt reached a record $17.05 trillion in the first quarter of 2023, with Americans racking up an extra $148 billion in debt on bills including mortgages, auto loans, and student loans.
“You’re seeing a lot of impact of inflation there,” said Thomas Nitzsche, a spokesperson for Money Management International. “When you are taking out a mortgage now, it’s probably reaching the top end of a lot of folks’ budgets.”
According to the New York Federal Reserve Bank of New York, mortgage balances increased by $121 billion in the first quarter. Auto loan balances jumped $10 billion, now totaling $1.56 trillion. Student loan balances increased by $9 billion to reach $1.6 trillion. Though some analysts had predicted credit card debt would top $1 trillion for the first time, balances remained steady at $986 billion.
“Especially with credit card debt, you’re seeing the average interest rate is over 20% on cards, so we’re not so much worried about the balance increasing, but certainly worried about the interest on that balance increasing for those consumers who do roll a balance from month to month,” Nitzsche told On Your Side.
Digging out of debt begins with creating a budget. “The first step is always understanding what’s happening. What’s coming in? What’s going out?” Nitzsche said. “Have a written plan. You can use a spreadsheet. Use an app or 3x5 cards. However you like to do it, but it’s important to have a budget in place.”
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