Collector - August 2018 - 12

FYI

'09

'10

'11

'12

(trillion)

26%

22%
in 2010

'13

'14

$3.84

'08

$3.64

'07

$3.17

'06

$2.96

'05

$2.75

$2.64

$2.57

$2.59

$2.68

$2.64

$2.47

$2.36

$2.19

$2.12

Q1 '04

Percent of
their income
Americans
owe for
consumer debt:

$3.40

Household Non-Mortgage
Debt Levels

in 2018

'15

'16

'17

'18
Source: New York Fed

American Consumer Debt is Set to Eclipse
$4 Trillion This Year
Survey finds consumers are willing to take on
more personal, auto and student loans.

A

s we mark nearly a decade since
the Great Recession, the recovery
years have yielded a boost to the
U.S. economy and a shrinking unemployment
rate. With more money in consumers'
pockets, their appetites toward borrowing
are mounting-and could reach up to $4
trillion in the next few months, according
to an analysis of Federal Reserve data by
LendingTree.
The biggest takeaway from the
LendingTree study is that Americans are
gradually amassing more debt during the
recovery period. Currently, consumers owe
more than 26 percent of their income for
consumer debt, up from 22 percent in the
tail end of the recession in 2010.
Breaking down the numbers, credit card
and auto loan borrowing grew by 7 percent
this year. However, the amount consumers

12

owe on credit cards, student loans and
personal loans fell by less than 0.1 percent
to $3.8 trillion.
"For nearly two years, consumer credit
has grown at a steady rate of 5 to 6 percent
annually. Even if borrowing levels increase at
the low end of that range, we expect the total
amount owed will exceed $4 trillion by the end
of 2018," according to the LendingTree report.
With consumers borrowing more,
how does this affect their ability to pay
down their loan obligations? It turns out
consumers are willing to pay off their
debts on time. LendingTree analysts
expected only 11 percent of consumers
would miss a loan payment in the next
three months-the lowest reading since
the survey began in 2013.
The report also shows credit card
delinquency rates remain relatively low,

despite recent reports of increases in
charge-offs at some credit card issuers.
Consumers' mortgage balances, which
increased by $57 billion in the first quarter
of this year to $8.94 trillion, represent
the largest share of household debt, the
Federal Reserve Bank of New York reports.
Total household debt levels, including
mortgages, soared to $13 trillion in the
first quarter of 2018.
Meanwhile, the Fed says 4.6 percent
of outstanding debt is in some stage
of delinquency. Of the $605 billion
of delinquent debt, $407 billion is at
least 90 days late. The upshot for the
accounts receivable management industry
is to work with consumers to help
recover outstanding debt on behalf of
businesses, nonprofit organizations and
governmental entities.

ACAINTERNATIONAL.ORG


https://www.newyorkfed.org/newsevents/news/research/2018/an180514 https://www.lendingtree.com/finance/consumer-debt-report-may-2018/ http://www.ACAINTERNATIONAL.ORG

Table of Contents for the Digital Edition of Collector - August 2018

Collector - August 2018 - Cover1
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