In June, Americans had racked up more than $1 trillion in credit card debt, marking the fourth time revolving debt had reached this treshold since January 1968.
The vast majority of that debt is paid off on time, but Americans still have more than $23 billion in delinquent credit card debt. In other words, many Americans have a credit card bill that’s more than 30 days overdue.
About 21% of Americans have been behind on their credit card payments at least once in their lives, but the number of reasons for delinquent payments is increasing.
According to a survey from NerdWallet, more than half of the 2,019 adults that were surveyed missed payments because they were spending too much money on non-essential items. The second-most cited reason was higher levels of non-credit card debt, such as mortgages, car payments and student loan payments.
More a third of those surveyed said higher interest rates and stagnant wages affected their ability to make their credit card payments on time.
The most common reason people missed credit card payments (35%) was a simple one: they forgot. Thiry-two percent of Americans said they had to pay for unexpected emergencies.
The amount of and type of debt Americans have varies depending on their age bracket. According to Northwestern Mutual’s 2018 Planning & Progress Study, older millennials – those between the ages of 25 and 34 – have the most debt: $42,000. In this age bracket, student loans account for 16% of debt, while mortgages make up just 3%.
Many older millennials are defaulting on student loans or having to consolidate their student debt into low-interest personal loans to pay down their education costs. According to Crediful.com. consolidating loans is often an effective solution to help put a repayment in place or to avoid collections.
Baby boomers – those over the age of 50 – have the last amount of debt in older adults at just $36,000. Their top sources of debt include credit cards, mortgages and car loans. While boomers have less debt than millennials, they also have less savings. Nearly a third of baby boomers have less than $25,000 put away for retirement, according to Northwestern Mutual. This means that those in this age bracket may wind up working longer than expected.
Overall, younger millennials and Gen Zs (ages 18-24) have the least amount of debt at just $22,000. Their biggest source of debt is student loans, but they also have a fair amount of credit card debt.
Experts consider student loan debt to be “good debt,” whereas credit card debt is considered “bad debt” due to higher interest rates.