15% of Americans Think They Will Never Get out of Debt
Americans carry an average of $29,800 in personal debt, excluding mortgage loans. The 2019 Northwestern Mutual Planning & Progress Study reveals that most consumers dedicate one-third (34%) of their monthly income to debt repayment, and 15% believe they will never be out of debt.
In addition, 22% of the respondents said their mortgage was their biggest source of debt. An identical percentage said credit cards were their primary source of debt. These figures vary slightly by generation. Baby Boomers and Gen Xers were more likely to cite mortgages as a top concern, while Millennials were more likely to cite credit cards. The youngest generation, Gen Z, said personal education loans were their biggest debt burdens.
Poor payment practices may be contributing to the impact of credit card debt: 12% of respondents said they only make their minimum card payments each month, which mostly covers the interest on the debt, not the principal. Surprisingly, 31% of Americans say their interest rates are over 15%, and 19% don’t even know their interest rate.
This year marks the tenth anniversary of the Planning & Progress Study. Comparing the results from 2009 and 2019, 74% of Americans say they carry less debt today than they did in 2009. Also, 71% say they feel financially secure now, compared to 47% then.