Personal debt levels in the USA continue to be alarmingly high. Thankfully in the last couple of years things have been moving slightly in the right direction. But the debt levels are still far too high.
The chart shows USA household debt in the 60% range of disposable income in the 1980s. It isn’t as if the 1980s in the USA were some low debt era. Personal debt was high then. It rose into the 120% range in the last 10 years and in the last few years dipped to the 110% range.
Given the large amount of debt falling into collection managing that debt has becoming increasingly important to local banks and credit unions. Companies like, Intelligent Banking Solutions, are helping those institutions deal with collections while building a strong business themselves.
As consumers we need to use debt sparingly and without our means or be trapped in a personal financial crisis. It is hard enough to get ahead today without creating problems such as paying high interest rate debt or penalties and fees for failing to pay back your obligations as required.
While too much mortgage debt is an issue, mortgage debt is less bad than other personal debt in my opinion. Student debt levels have been increasing dramatically over the last 10 years.
Low interest rates today can tempt consumers into unwise borrowing. That should be avoided. Other charts will show debt payments compared to disposable income. I believe those charts do not provide a good view at this time, due to low interest rates. If interest rates increase the debt payments required could increase dramatically very quickly.