Average millennial owes more than $100K in non-mortgage debt: survey

A Real Estate Witch survey said that the average millennial has accumulated substantial debt that is preventing them from planning for the future. (iStock)

The majority of U.S. millennials (72%) owe roughly $117,000 in non-mortgage debt, making it hard for them to save or plan for the future, according to a recent survey.

Real Estate Witch surveyed 1,000 millennials — the generation born between 1981 and 1996 — about their finances, savings and credit history and said that these debt holders struggle to pay for basic expenses. 

For example, 27% of those surveyed said they could not afford gasoline, 29% said they could not afford their mortgage and 27% said they could not afford medical care. 

The majority of survey respondents said they believed they could repay their debt in five years. However, one in 10 respondents said they believed it would take at least a decade to repay, and one in 16 said that they would never be able to pay off their debt.

"The generation's debt burden may also make it more difficult to afford discretionary expenses, such as a vacation (45%), that could improve their quality of life," Real Estate Witch said. "It may also explain why millennials are slow to reach traditional markers of adulthood, such as starting a family."

If you are struggling financially, you could consider taking out a personal loan to help pay down high-interest debt at a lower rate, saving you money each month. Visit Credible to find your personalized interest rate without affecting your credit score.


Credit card debt comes out on top

The survey said that the biggest culprit of millennials' debt is credit card spending, with 67% of respondents carrying a balance that averages $5,349.

Credit card debt jumped by $46 billion, or 13%, by the end of the second quarter of 2022, the biggest percentage increase in more than 20 years, according to the Federal Reserve Bank of New York. In addition to credit card balances, Americans also opened 233 million new credit card accounts during the second quarter, the most since 2008.

More than a quarter of survey respondents (29%) reported not paying their credit card bill in full every month and 23% of these delinquent borrowers have over $10,000 in debt. 

"Among millennials, credit card debt tends to increase with age," the Real Estate Witch survey said. "Geriatric millennials, who are farther along in their credit journey, carry an average credit card balance of $6,048 — about 20% more than younger millennials."

If you need help paying off your credit card debt, you could consider consolidating it with a personal loan at a lower interest rate, saving you money each month. Visit Credible to find your personalized interest rate without affecting your credit score.


Student loan debt adds to generational finance trouble

Student loans were the second-most-common source of millennials' debt, with 48% of survey respondents listing it as the reason behind their financial woes. 

Those with student loans reported having a much higher debt burden than those with outstanding credit card bills, the survey said. More than half (54%) of millennials with student loans reported owing $10,000–$99,999, and those studying advanced degree programs (12%) had $100,000 to $199,999 in outstanding debt. The survey also said that 40% of millennials with student loans don't know the interest rate on their debt.

"Millennials with student debt may find it more difficult to start families, buy homes, and save for retirement than those who are debt-free," Real Estate Witch stated. "Of those who do not currently have debt, more than 1 in 4 (28%) say it's because they never borrowed student loans."

Millennials with education debt could get help through the student loan relief plan announced by President Joe Biden in August. The Biden administration announced the cancellation of $20,000 in student loans per borrower if they went to college on Pell Grants and $10,000 in student loan debt per borrower for those who didn't. The cancellation applies to all federal student loan borrowers making less than $125,000 per year or $250,000 per year for married couples. They also unveiled a proposal that would allow those who have undergraduate loans to be able to cap their repayment at 5% of their monthly income.

If you have private student loans, these will not qualify for federal student debt cancellation. However, you can reduce your monthly payment by refinancing to a lower interest rate. Visit Credible to find your personalized interest rate without affecting your credit score.

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