Poll: 2 in 3 U.S. adults with debt doubt they'll ever live debt-free

Debt Free Living Survey

More than 2 out of 3 U.S. adults (68 percent) don't know when, or if, they will ever be debt-free, according to a new CreditCards.com survey.

That includes 30 percent of respondents who said they thought they would never be out of debt, and an additional 38 percent who said they didn’t know when they would be debt-free.

Key findings

Key findings of the survey of 1,114 U.S. adults include:

  • Who is most down about their debt? People who take out payday loans and have medical debts are the most pessimistic about repaying those obligations, with about half of each group anticipating they will carry those debts to the grave, according to the poll. Those who owe money on credit cards, student loans, mortgages and auto loans feel better about their repayment prospects.

  • The older we are, the gloomier we get about debt: Pessimism about living debt-free is abundant and increases with age. Of those carrying debt, 65 percent of millennials (ages 18-36) either don't know when they'll pay it off or think they never will. That percentage goes up with each generation: with 68 percent of Generation X (37-52), 70 percent of baby boomers (53-71) and 83 percent of the Silent Generation (72+) doubting their abilities to ever get out of debt.

  • In debt until death: A whopping 31 million Americans with credit card debt think they will die with debt.

  • Out of the red ... in nine years: Of those who do see light at the end of the tunnel and who offered an estimate of how soon they would escape debt, the average debtor expects to have everything paid off in nine years.

The survey was fielded Dec. 21-22, 2017, on behalf of CreditCards.com by YouGov (see survey methodology).

Debt piling up

Americans continue to pile up debt, even as the survey results underscore that people consider adding debt to be financially unwise.

Revolving debt, most of it carried on credit cards, is at a record-high level of $1.022 trillion. Overall household debt, including mortgages, student loans, car loans and credit card balances, has hit $3.83 trillion, the Federal Reserve Bank of New York reported in November 2017.

Although increases in consumer debt can indicate higher economic confidence, it also represents a reversal from the shedding of personal debt that took place after the 2008-2009 recession, when banks tightened lending standards and consumers grew wary of charging too much on credit cards and taking out new loans.

Now, people are adding debt, even as they tell pollsters they’d prefer not to. Just 13 percent said they would be “comfortable” taking on new debt in 2018, with 45 percent saying they would not, according to the survey.

When pollsters asked them to describe their feelings about debt in a word or two, some were hopeful, but responses also included 18 who wrote “stressed” or “stressful,” 22 who replied “overwhelmed,” and 10 who said “sucks.”

Good debt versus bad debt

Type of debt Percentage who say it's 'good debt' Percentage who say it's 'bad debt'
Auto loan 32% 23%
Credit cards 13%  59% 
Home equity loan  30%  24% 
Medical debt 12% 49%
Mortgage 53% 13%
Payday loan 6% 67%
Personal loan 15% 41%
Student loan 23% 45%
Respondents were asked, “To what extent do you think each of the following types of debt are good or bad debt?”

By large margins, people consider credit card debt, medical debt and payday loans to be “bad debt,” while a majority believes mortgages are “good debt.”

Americans also see auto loans and home equity loans in a positive light. The types of debt viewed favorably are typically associated with acquiring or improving valuable assets such as homes and cars.

Just 5 percent of the adults surveyed said that all types of debt we asked about should be considered bad debt.

Lucia Dunn, an economics professor at Ohio State University, says U.S. attitudes toward taking on personal debt have become more permissive over the years, as financial institutions have become more adept at offering creative ways to borrow money.

Her research shows that young people today are far more likely to take on debt than prior generations and are slower to pay it back.

“It used to be considered sort of shifty if you had debts,” she says. “Maybe not with a mortgage, but if you had run up debts to merchants, that was considered not a totally respectable situation.”

She says Americans previously used credit as a last resort, when their incomes were insufficient to meet their needs. Now, though, consumers’ stress levels are rising along with their debt levels, she says.

“We have more and more people finding it acceptable to use credit for luxury items to make their lives more pleasant,” she says. “That’s something we need to think about.”

According to the Federal Reserve, 77 percent of U.S. families held some form of debt in 2016. That includes 44 percent who had outstanding credit card balances and 42 percent with mortgages.

In 1983, just 37 percent said they had credit card debt and 37 percent had mortgages.

The importance of managing credit well

Taking on debt is not necessarily an unwise idea, but consumers need to know how to manage finances responsibly, says Kim Cole, a financial educator with Navicore Solutions, a nonprofit credit counseling agency based in New Jersey.

“Credit as a whole is not an evil thing. In a lot of cases, we need credit,” she says.

“My concern when looking at 2008 versus today is that when we see the fact that consumer debt has exceeded where we were then, what did we learn? Did the lessons carry over? Did we really learn our lesson?”

She advises drawing up a household budget, avoiding extravagant big purchases, cutting the financial cord to adult children and creating an emergency fund in case of a job loss or medical issue.

“Having it there and living with your means will make you much more comfortable if there is some kind of financial tragedy,” she says.

Survey methodology

The survey was conducted online for CreditCards.com by YouGov and sampled 1,114 adults on Dec. 21-22, 2017. The figures have been weighted and are representative of the U.S. adult population (18+).

See related: Consumers set all-time record revolving debt record


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Updated: 10-17-2018