New NerdWallet study says household debt is growing in the U.S.

Published: Jan. 12, 2023 at 5:32 PM CST
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BIRMINGHAM, Ala. (WBRC) - It’s getting more expensive for American households to make ends meet. A new study from NerdWallet shows nearly half of employed Americans say their pay isn’t enough to keep up with inflation.

That study says the average U.S. household owes more than $165,000 in debt, an increase of more than 7.5% year over year.

NerdWallet says 45% of employed Americans said their pay hasn’t increased enough over the last year to keep up with inflation.

The study said in the past year, median household income has grown by just 4% while the overall cost of living has jumped 8%.

Many are now turning to credit cards to pay for necessities like food, gas, and medical bills.

The average revolving U.S. credit card debt is nearly $7,500 and the study says nearly 7 in 10 Americans have financial concerns about the next 12 months saying they worry they’ll have to go into more debt to cover essentials.

“It’s January. A lot of people have money-related New Year’s resolutions,” said Personal Finance Expert for NerdWallet, Sara Rathner.

“This is a good time to take a look at where your money’s going every month and see if there are any obvious, easy cuts you can make out of your spending. And that’s money you can apply toward debt repayments, or savings, or other things that you need to buy in the coming months,” Rathner explained.

Rathner also recommended holding off on making big financial moves right now, if possible, like buying a new home or car.

And she said beware of those “buy now, pay later” services because if you can’t afford to pay for it right now, it might be tough to make those payments later.

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