Despite the fact that indicators point to the U.S. economy continuing its recovery, more Americans now believe that their level of personal debt is so high, that they will be unable to fully repay it before they die.
In the annual study by CreditCards.com, the number of Americans who believe that they not be able to repay all of their personal debt in their lifetime has increased from 18 percent last year to 21 percent this year. Personal debt includes unsecured debt such as credit cars as well as secured debt in the form of car payments and mortgages. In fact, many respondents believe that they will need to get to least seventy before they will realistically be debt-free.
On the other hand, there has also been a corresponding increase in the number of people who do not have any significant debt with 22 percent enjoying their financial freedom up from 14 percent the year before. However, that still leaves close to 80 percent of American adults with significant financial constraints.
There has also been a growing divide between higher and lower earners debt. In many cases this is caused by student loans, which is the biggest concern for higher bracket earners, as tuition and the other costs of getting a degree continue to skyrocket. Also in recent times, the tighter credit restrictions have prevented many people with lower incomes from generating the same levels of debt that were able to before the financial crisis.
As a result, around a quarter of the people earning $30,000 or less now have no debt, compared to only 17 percent of people who earn more than $75,000 a year. While part of this is probably due to lower income individuals focusing on just making ends meet, the likelihood of someone in a lower income bracket getting approved for a personal loan has also fallen. In the end this may turn out to be a blessing.