The level of personal debt in the USA has always been a matter of concern. The recession did not help of course and many who had managed their finances fairly well before the crash fell victim due to circumstances largely beyond their control. They may have had a manageable level of credit card debt even though it is not a good idea to carry that forward because of the high interest rate charged at the end of each month. However what was manageable was suddenly a problem as unemployment figures rose due to the problems that spread beyond national borders. Those who were already in financial trouble had no chance of recovery.
The recession has gone and a great deal of debt has been written off. Job creation has been on the 'up' for many months in succession and although wages have only been rising slowly the signs in the economy are good. However the level of debt is extremely disturbing, especially bearing in mind the need for citizens to save for retirement. A recent report by CreditCards.com suggests that 20% of the people interviewed believe that they will be unable to repay their current debts in their lifetime. The survey spoke to 4,000 people and while 22% also said they had no significant debt, previous studies along the same lines two years ago had those who felt their debt levels were unmanageable were in single figures as a percentage.
Equally worrying was the perception that over 30% of the respondents had was the fact they expected to be well beyond retirement age before they could clear their debts. It assumes that they are not going to take on extra debt in the future. There is such a thing as 'good debt' if it works to positively help someone's situation. If for example someone is paying a high level of interest on credit cards they ought to be able to save themselves money by clearing that debt with no credit check loans at a lower rate of interest.
The report backs up a similar publication by the Pew Charitable Trusts that says that 80% of Americans are in debt and it is particularly the case amongst those in middle age. Obviously where that debt is in the form of a mortgage that may be helping them build up an asset if the real estate involved is growing in value.
The Trusts' report broke things down into different age groups and different forms of debt. It seems the younger generation, described in the report as 'Millennials' are more likely to have debt relating to their education, and perhaps a car loan than a mortgage. That is not particularly surprising as the recession and the fall in real estate values seems to have made the younger generation more reluctant to buy property at this stage. The average credit card debt among this generation is $2,500 in the 40% that admit a debt.