Despite inflation, Americans’ monthly debt bills are below pandemic levels, Experian says

Americans' monthly debt bills are smaller than they were during the height of the COVID-19 pandemic despite high inflation and rising costs, according to Experian. 

The credit reporting company wrote in a blog post that "monthly payments overall are still lower than they were during the pandemic." Americans' average monthly debt payment in June was $1,014, $31 less than the average amount paid during the pandemic.  

That decrease was due to smaller credit card debt payments, which averaged $169 in June compared to $203 in March 2020. However, mortgage and auto loans both saw monthly payments increase in June compared to 2020.  

"Credit card balances declined immediately at the start of the pandemic as consumers stopped spending partially or completely on many goods and services," Experian said. "This reduction in spending, as well as government aid in the form of stimulus checks and other benefits, helped bank balances grow."

If you're considering a personal loan to help pay off your credit card debt, shopping around for the lowest interest rate possible is essential. You can visit Credible to compare personal loan rates for free without impacting your credit score.

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Debt payments lower than in the pandemic but are trending up

On a national level, the average minimum credit card and loan payments a consumer paid each month increased annually in June, according to Experian.

Average monthly payments for credit cards, mortgages and auto loans all increased from what consumers paid in June 2021 – with the biggest jump registered in mortgage payments, which increased by $65.

"The increase in average monthly mortgage payments shouldn't come as a surprise either, as consumers scrambled to buy what inventory remained as new home construction ground to a near halt during the pandemic," Experian said. "However, the vast majority of these mortgages were financed before mortgage rates began to rise in late 2021—more indication that price increases, not higher mortgage rates, drove most of the increase."

Experian also noted that most types of loans – auto loans, mortgages and personal loans – are typically fixed rate and aren't directly affected by the Federal Reserve's interest rate hikes during their repayment term. However, credit cards are typically issued with variable rates, so increased interest rates could ultimately impact the minimum monthly payments that consumers need to make.

Personal loan rates vary considerably by credit score and loan term. If you're curious about what kind of personal loan rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders without affecting your credit score.

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Consumers often rely on credit cards to pay for essentials

Consumers often used their credit cards to pay for gasoline and groceries in June, especially if it earned them rewards such as cash, points or airline miles, according to Experian.  

A recent Wells Fargo study said that 71% of Americans have rewards credit cards.

Nearly half of those cardholders have used these earned benefits to help offset the price of some everyday expenses. And two-thirds (65%) said they cared about credit card rewards now more than ever, the study said.

If you are looking to reduce your expenses, you could consider using a personal loan to help pay off high-interest debt at a lower rate, saving you money each month. You can visit Credible to find your personalized interest rate today.

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