Americans under age 50 were more than $9.5 trillion in debt in this year’s third quarter, compared to about $9.3 trillion in the preceding three months, marking the largest quarterly increase since 2022’s fourth quarter, U.S. Federal Reserve data shows.
Since the beginning of the COVID War, individuals under 50 have added a net new $2.1 trillion to their debt load, while people 50 and older added about $900 billion, Bloomberg said.
U.S. households collectively borrowed another $228 billion during the quarter, raising the total owed to $17.3 trillion. Debt held by adults 50 and older remained about the same after peaking in this year’s first quarter; the increase came largely from younger people.
Adults in their 40s have the highest piles of debt. Those in their 30s and 50s have about the same debt levels as each other. Households under age 50 are toting about $1.2 trillion in student debt, while older adults have about $400 billion in college loans remaining.
The new debt was largely due to mortgage loans, more credit card usage, and new student debt. Credit card balances swelled by about 4.7 percent, or about $48 billion, to a total of $1.08 trillion, a feat we noted in “Credit Card Debt Nears $1 Trillion, Sets Record” (7 Feb 2023).
About 5.8 percent of credit cards fell at least 90 days late in payments during the quarter, compared to 3.7 percent a year earlier.
Auto loan balances grew by $13 billion, reaching a record $1.6 trillion. Households with adults under 50 are toting $1.2 trillion in student debt; older households have about $400 billion in student loans remaining.
In the last four years, Americans have signed onto an additional $264 billion in vehicle loans. For borrowers in their 20s and 30s, vehicle loans that are more than 90 days behind in payments have reached the highest number since the early days of the Great Recession, Fed figures show.
TREND FORECAST: With prices still rising, interest rates remaining high, and wage increases slowing, more Americans will default on their credit cards and other loans. That will put even more pressure on banks, adding to the number of bank failures or buyouts in 2024.