MINNEAPOLIS (WCCO) — As the student debt crisis has topped headlines, credit card debt has been inching up as well. According to the Northwestern Mutual 2019 Planning & Progress Study, a quarter of millennials say credit cards are their main source of debt.
So, how much debt do we have? Good Question.
Outside of mortgages, the 2019 survey of more than 2,000 found the average U.S. adult is in debt $29,800. One of five are unsure of exactly how much debt they have.
In 2019, information from the Federal Reserve Bank of New York found mortgages make up the most of U.S. personal debt ($9.4T). Student debt comes in second at $1.48T followed by car loans ($1.3T) and credit cards ($87B).
“It’s almost a portfolio of debt is what we have now rather than an investment portfolio for the younger generation,” says Joyce Serido, a financial literacy researcher at the University of Minnesota.
According to Northwestern Mutual’s survey, Gen Z adults say college loans are their biggest source of debt. Millennials point to credit cards and Gen X/Baby Boomers say it’s mortgages.
Serido says part of the differences in generations has to do with changes in the world.
“I think the biggest difference is that you can get into more trouble today,” Serido says.
She points to the offer of pensions diminishing and credit card offers increasing. Wages have remained relatively stagnant against inflation while housing prices are up. The cost of college has outpaced the cost of living.
“They use their credit cards to smooth out consumption,” she says. “I don’t know where they sit long-term, but they’re paralyzed by it short-term.”