Nearly 30% of Americans behind on debt payments in largest metros, study finds
Consumers falling behind on debts like credit cards, auto loans, mortgages and student loans
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American households racked up a record $17.29 trillion in debt last year, driven by mortgage, credit card and student loan balances, according to the latest numbers from the Federal Reserve Bank of New York. Now, fresh data indicates an alarmingly high percentage of consumers began falling behind on their payments at the same time.
A new study released by LendingTree found 29.6% of residents in the nation's 100 largest metros were behind on at least one debt payment during the third quarter of 2023, and 27.3% had serious delinquencies that were over 90 days past due or more. More than a quarter, 26.2%, had debt in collections.
Almost 30% of Americans were behind on at least one debt payment in the third quarter of 2023, nearly all of which were in serious delinquency, according to a new LendingTree analysis. (iStock / iStock)
"That’s a huge number of people behind on their debt payments," LendingTree chief credit analyst Matt Schulz said. "Late payments can damage your credit score, making things even tougher on you financially."
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More than a third of millennials (36.7%), ages 27 to 42, and Gen Zers (36.2%), ages 18 to 26, had at least one delinquent account last year. Millennials were found to have the highest default rates on credit card accounts (19.6%), auto payments (7.8%), personal loans (8.3%) and other debts (27.9%). However, Gen Xers, ages 43 to 58, were most likely to be behind on a mortgage payment, at 1.2%.
Gen Xers, ages 43 to 58, were the most likely to fall behind on a mortgage payment in the third quarter, LendingTree found. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
"In the face of cooling, albeit still high inflation, and steep interest rates, a large number of Americans are struggling to keep up with their debt payments," Jacob Channel, LendingTree's senior economist, told FOX Business. "This is especially true for members of younger generations, who might not have the incomes or savings they need to really stay on top of what they owe."
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"While there's no sugar-coating how tough it can be on your credit score and broader finances when you fall behind on payments, the good news is that being delinquent on debt isn't necessarily the end of the world," Channel said.
U.S. consumers have increasingly used credit cards for everyday necessities as inflation remains elevated and continues to squeeze household budgets. (Robert Nickelsberg/Getty Images / Getty Images)
"Though it's no walk in the park, plenty of people who were once in serious debt have managed to climb out of the hole they found themselves in — especially if they were willing to carefully budget and rein their spending in."
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In the study, LendingTree analyzed anonymized credit reports of roughly 310,000 users on its platform from the largest 100 metros according to U.S. Census data.