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Dvorkin On Debt: This Week’s Good News And Bad News



It seems like an obvious truth: America has a big problem with personal debt. The statistics seem to prove it, from owing $854.2 billion on credit cards to $1.2 trillion in student loans.

It’s not always so clear, however. For instance, a recent survey revealed…

While 70 percent of millennials indicated that they carry debt, the total average debt for all respondents was $43,264 — down 9.3 percent from $47,689 in 2015.

Then again, Experian recently crunched some numbers to prove…

U.S. automotive loan balances climbed 11.5 percent to reach $987 billion in the fourth quarter of 2015. …This marks the highest level on record since Experian began publicly tracking the data in 2006.

However, GoBankingRates just polled taxpayers and asked what they plan to do with a tax refund if they get one…

Of those who do expect to receive a refund, the most common answer respondents picked is paying off debt like a loan or credit card, with 27 percent choosing this response.

I could go on like this all day — and in fact, this is often what my day is like. I scour the business and academic research for clues about America’s views on debt. Many days are just like this one: a mixed bag.

If you simply look at the headlines of these studies and polls, you’re likely to be more confused than enlightened. To get an accurate portrait of Americans’ personal debt, you need to dive deeper.

For instance, that poll of millennials contained this quote from Tom White, the CEO of IQuantifi, the firm that conducted it…

Debts, especially student loans, are driving millennials to focus on their finances at a younger age. Our study found a significant decrease in millennials’ average individual debt burden over just last year. We believe that this generation has been forced to tackle significant financial obstacles and is searching for financial guidance and knowledge to help them do so.

Basically, White is theorizing that being crushed by student loans early in life has made millennials more fiscally responsible as they age. If that’s true, and if the country figures out a solution to the student loan crisis, it could mean the net result is a positive one.

Even that scary Experian report — which shows Americans rushing to buy new cars as the economy improves, even if their personal debt hasn’t — has a silver lining…

Findings from the report show that 30-day delinquencies are down across the board. This pushes the overall rate to 2.57 percent from 2.62 percent a year ago.

So what’s the lesson here? For individuals struggling to conquer their debts, don’t worry about what everyone else is doing — because it’s quite possible even the experts aren’t sure.

Instead, take a survey of your own financial situation. Solving your personal debt is, well, personal. Pollsters can’t tell you what to do, but a certified credit counselor can. That’s why I always recommend people call one. While there are many to choose from, you can call at 1-800-810-0989 and get a referral. The call is free, and so is the debt analysis.

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