What’s Your Debt Story?


Nearly half of Americans say their expenses are equal to or greater than their income, according to a new study from the Center for Financial Services Innovation. Revolving credit, particularly credit cards, is an increasingly significant part of the equation.

According to the Federal Reserve Bank of New York’s Household Debt and Credit report data, Americans’ total credit card debt hit $905 billion in 2017 — an increase of 8% from 2016.

The phrase “credit card debt” usually triggers red flags when we’re talking about long-term financial planning. In fact, the average US household now carries $15,654 on their cards and pays $1,141 annually in interest.1 But debt, in and of itself, isn’t good or bad. Rather than immediately deciding your debt is bad, ask yourself how your debt levels are affecting the way you live.

What’s the Big Picture?

Our current high debt levels reflect a previous generation of low interest rates, an active housing market, a robust credit market, and relative peace and prosperity. This meant more consumers with credit cards and loans. Debt is not bad in and of itself, especially in a healthy economy. But from 2007-2009, many highly-leveraged people and companies were vulnerable to foreclosure and bankruptcy during the Great Recession.

Even in today’s growing economy, certain deficits stand out.

  • Incomes are growing, but the costs of medical care, housing, and food continue to grow faster.1
  • Student loans are a BIG problem. As of September 2018, the average US household had $43,538 in student loan debt.1

What’s Your Story?

While looking at big picture debt trends is useful for predicting where the economy is headed, your debt story is all about you. Debt can be a big part of our lives and is always hanging over our heads. To explore your situation, consider your answers to the questions below:

  • What is your debt story?
  • What are your attitudes about debt?
  • Why do you think that you feel the way you do?
  • Are you comfortable with your current level of debt?
  • How does your current level of debt cause problems with loved ones?
  • What is your strategy for paying off your debt?
  • What resources will you use?

There are plenty of ways to attack the problem of debt. Taking a closer look at your debt story and making a plan can put you on a better path to your financial future.

1 Tsosie, Claire and El Issa, Erin. (2018 December). 2018 American Household Credit Card Debt Study.

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