The amount of outstanding debt hit $16.9 trillion at the end of 2022, with the amount of unpaid credit card debt surpassing levels set before the start of the COVID-19 pandemic, and while the volume of consumers who had debts placed with third-party collection agencies reached a new low and the average collection amount ticked downward, the number of consumers behind on their auto loan and credit card payments continued to grow.
The $16.9 trillion of outstanding debt is nearly $3 trillion higher than at the end of 2019, which was before the COVID-19 pandemic hit the United States.
Delinquency rates are rising past their pre-pandemic levels, too. And what is puzzling to researchers and economists is that the economy is fairly strong. The number of unemployed individuals is at a 50-year low and federal student loans are still in forbearance. Once that ends, the number of individuals unable to pay their credit cards and auto loans is going to get a lot worse, experts fear.
Inflation is still being cited as a potential culprit tightening the wallets of individuals. Everything costs a lot more than it did a few years ago and it’s possible that those higher prices are making it harder for people to make ends meet, according to researchers at the Federal Reserve Bank of New York.
One area of concern illustrated by the data is the number of young people who are falling behind on their debt payments. More consumers in their 20s and 30s are behind on their credit card and auto loan payments — surpassing pre-pandemic levels — and accelerating faster than individuals who are older.