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Research and Statistics

Consumer debt reached all-time high prior to coronavirus crisis: study

New data from Experian show total debt increased by $2.3 billion from the peak of the Great Recession to last year

Summary

Even before the coronavirus pandemic hit, U.S. consumers had reached all-time highs in mortgage, auto, credit card and student loan debt. New data from Experian show U.S. consumer debt registered a record-breaking $14.1 trillion in 2019.

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Even before the coronavirus pandemic hit, U.S. consumers had reached all-time highs in mortgage, auto, credit card and student loan debt in 2019. In total, U.S. consumer debt registered a record-breaking $14.1 trillion last year.

Much will change in the debt figures we see over the coming year, as COVID-19 continues to wreak havoc on the economy and the personal finances of millions of Americans. But from Experian’s recently released annual Consumer Debt Study, we are afforded a pre-pandemic snapshot.

Total debt in 2019 increased nearly $2.3 trillion since 2009’s peak of the Great Recession, setting new records in almost every consumer debt category. But several promising signals accompany the growth.

For instance, Experian’s findings show that credit scores are at all-time highs and delinquencies at record lows, suggesting responsible repayment behavior. In addition, income growth is outpacing debt growth, leading to significantly lower debt-to-income ratios than after the financial crisis.

In breaking down the average debt levels per American, Experian found that Generation X adults, ages 40 to 55, carry the most total debt, at an average of $135,841. They also hold the most credit card debt of any generation, averaging $8,215.

See related: Most Americans worried about paying bills during coronavirus crisis: survey

Total debt and credit card balances are lower in both the younger generations and the older generations. For the younger Generation Z and millennial age groups, many of them do not yet hold mortgages, or if they do, their mortgage balances are often lower due to having purchased lower-value homes at this stage in their financial life.

For the older baby boomers and Silent Generation members, many mortgage balances are nearing their pay-off, or have been retired entirely, leading to a drop-off in average total debt.

Still, baby boomers owe more on their credit cards than millennials, at an average card debt of $6,949 per baby boomer versus $4,889 among millennials. Boomers also have more total debt ($96,984 versus $78,396), despite the higher likelihood of millennials holding student loan debt.

Experian’s 2019 Consumer Debt Study draws on a statistically relevant aggregate sampling of its consumer credit database, using non-personally identified data. The findings of its analysis were released March 9.

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