Consumer debt hit a record high in the spring of 2023, reaching an astonishing $16.9 trillion—the highest level since the Great Recession and up from just $14.14 trillion in 2019. The news was compounded by the fact that delinquencies on consumer debt are also on the rise. It is a troubling sign for many people struggling with consumer debt and could have long-term consequences for our economic future. Let’s break down what this means for consumers in debt and what can be done to help alleviate the debt.
The Rise Of Household Debt Nationwide
Consumer debt includes all debts incurred by individuals or households, such as credit card balances, auto loans, student loans, and mortgages. The Federal Reserve Bank’s Quarterly Report on Household Debt and Credit, total household debt climbed to a record high of $16.9 trillion in the first quarter of 2023a 6 percent increase from one year ago! Delinquency rates also rose to 8 percent—the highest since 2013, when they peaked at 9 percent during the Great Recession.
What This Means For Consumers
This news is not only concerning but should be taken seriously by anyone with consumer debt, especially those who are delinquent on their payments or have been hit hardest financially by the pandemic or other economic downturns over the past few years. It is crucial to understand how your finances affect more significant economic trends so that you can make informed decisions about how to manage your consumer debt.
Reigning In The Unruly Consumer Debt
If you are struggling with consumer debt, there are several ways you can take control and get back on track financially: create a budget, pay down high-interest debts first, consider consolidating your debts into one loan or payment plan (if possible), take advantage of government programs like stimulus checks if available, and talk to a financial professional if needed for additional advice and guidance. Taking proactive steps can help you tackle consumer debt head-on and prevent financial hardships.
Last Word
The news that consumer debt has reached an all-time high should serve as a wake-up call to anyone struggling with their own finances. While it may seem daunting at first glance, taking proactive steps now can make all the difference in tackling your debt head-on before it gets out of hand or becomes unmanageable. From creating budgets to consolidating debts and speaking with a financial professional if needed — these strategies will help ensure that you stay afloat financially and don’t get stuck under an ever-growing mountain of consumer debt.