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Americans Have Racked Up $13.15 Trillion In Debt

While the economy continues to grow, so is the debt load for American households. A new report from Nerdwallet found that in 2017 Americans had a total of $13.15 trillion in debt. The vast majority of that debt, $8.88 trillion, came from mortgages. Americans owe $1.38 trillion in student loans and $1.22 trillion in auto loans. Credit cards account for $931 billion in debt, an increase of seven percent from 2016. 

Consumers reported that the increase in credit card debt, which averages around $16,000 per household, is due to "unnecessary spending."

Despite being a low percentage of overall debt, credit cards can be very costly for consumers.

“Credit card debt is one of the most expensive types of debt, and consumers who carry it pay an average of $1,292 per year in interest on it, assuming an average annual percentage rate of 18.76 percent.”

Consumers can expect the interest they pay to increase if the Federal Reserve votes to increases interest rates.

The Fed meets Dec. 12-13 to vote on whether to increase interest rates by a 0.25 percentage point. This will have an impact on anyone with a credit product — like a credit card or loan — with a variable interest rate. If the Fed increases rates, average annual interest will rise from $904 to $919, according to NerdWallet’s analysis. 

Although an increase of $15 a year, or just over a buck a month, doesn’t sound like much, this could just be the beginning. The Fed is expected to continue to increase rates in 2018 and 2019, so these numbers could continue to creep up and add to consumers’ debt burdens.

Overall, the average household has about $133,568 in debt. 

Photo: Getty Images