The increase comes as major expenses continue to outpace income growth
Household debt totaled $12.96 trillion in 2017, growing to exceed the amount owed at the beginning of the Great Recession, which was $12.37 trillion, according to the American Household Credit Card Debt Study released by NerdWallet.
NerdWallet said that mortgages were the debt type with the biggest total carried by US consumers at $8.74 trillion. Mortgages were followed by student loans at $1.36 trillion, auto loans at $1.21 trillion, and credit card debt at $905 billion.
The average US household carried $173,995 in mortgage debt. Student loans followed by average debt size at $46,597, while auto loan debt averaged $27,669 and credit card debt averaged $15,654. On average, a US household now carries $131,431 of any type of debt.
NerdWallet said the increase in total household debt comes as major expenses continue to outpace income growth. Through the past decade, income growth has failed to keep pace with increases in costs of major expenses such as medical care and food. While the median household income grew 20% in the past 10 years, the increase was more significant for expenses. The same period saw a 34% increase in medical costs, while food and housing costs rose 22% and 20%, respectively.
"With many expenses growing faster than wages, consumers are often forced to take on credit card debt to pay medical bills and other essentials," says Kimberly Palmer, NerdWallet's credit cards expert. "While credit cards are appealing, debt can quickly weigh down household budgets if the balances aren't paid off in full each month. To get out from under credit card debt, consumers often have to cut back other parts of their spending or increase their earning power — not easy things to do in the current economy."
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Household debt continues higher, mortgages reach $8.74 trillion
NerdWallet said that mortgages were the debt type with the biggest total carried by US consumers at $8.74 trillion. Mortgages were followed by student loans at $1.36 trillion, auto loans at $1.21 trillion, and credit card debt at $905 billion.
The average US household carried $173,995 in mortgage debt. Student loans followed by average debt size at $46,597, while auto loan debt averaged $27,669 and credit card debt averaged $15,654. On average, a US household now carries $131,431 of any type of debt.
NerdWallet said the increase in total household debt comes as major expenses continue to outpace income growth. Through the past decade, income growth has failed to keep pace with increases in costs of major expenses such as medical care and food. While the median household income grew 20% in the past 10 years, the increase was more significant for expenses. The same period saw a 34% increase in medical costs, while food and housing costs rose 22% and 20%, respectively.
"With many expenses growing faster than wages, consumers are often forced to take on credit card debt to pay medical bills and other essentials," says Kimberly Palmer, NerdWallet's credit cards expert. "While credit cards are appealing, debt can quickly weigh down household budgets if the balances aren't paid off in full each month. To get out from under credit card debt, consumers often have to cut back other parts of their spending or increase their earning power — not easy things to do in the current economy."
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Household debt leads to holiday stress – survey
Household debt continues higher, mortgages reach $8.74 trillion
