As Americans, we’re pretty much all in debt. How bad is the debt crisis exactly? That depends on who you ask. And when. The Federal Reserve keeps a close eye on trends influencing lending, debt, and the overall economy. A new quarterly report is released every three months. The Federal Reserve report in June 2018 was pretty dire. US household debt rose to its highest amount ever: $13.29 trillion in the second quarter.
That figure is mind boggling and unfortunately consumer debt is only expected to continue to soar. Chances are you own—or owe—a small portion of our nation’s consumer debt. But not all consumer debt is created equal.
Unsurprisingly, most of the consumer debt is taken up by mortgages and other debts related to housing. Currently Americans owe a whopping $9 trillion, which is an increase of $308 billion from last year. American Banker conducted an analysis of more than 4,300 homeowners and found that over a two-year period, they had an average increased spending of $9,327.
A smaller but still sizeable portion of money tracked by The Federal Reserve is taken up by auto loans, which comprise $1.24 trillion dollars of the total consumer debt which is $48 billion more than last year’s second quarter. That may seem like a relatively small figure of the whole, but auto debts have been on a massive upward trend over the last six years.
Americans are notorious for swiping that plastic strip without thinking about the consequences, and the numbers seem to agree: credit card debt has hit $1.02 trillion. That’s a startling figure for a payment method often used for smaller items, such as gas, groceries, and Starbucks. Consumers continue to spend more and save less, consumer spending increased by 0.6% with personal income increasing by only 0.3% according to the Bureau of Economic Analysis.
Feeling intimidated by that $13.29 trillion? We all probably should. It’s money that will have to be paid back, with interest. If you’d like help reducing your own piece of the American debt pie, contact Americor to discuss a variety of debt solutions that can save your wallet and your future.