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CONSUMER ATTITUDES TOWARD DEBT - US - NOVEMBER 2017

Published By :

Mintel

Published Date : Dec 2017

Category :

Banking

No. of Pages : N/A

While half of consumers believe that taking on debt is a bad decision (regardless of type), US consumers continue to add to the overall debt total. Most are confident in their ability to make debt payments, but financial services are still charged with providing additional education and insight to help consumers understand what they need to pay back, and in what timing. Paying down debt is a top financial priority, and FSIs (financial service institutions) can make it easier by providing new technology and ways to make consumers feel more in control of their debt payment strategy.

Table of contents
OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
Overview
The issues
Consumers see hierarchy of debt
Figure 1: Debt hierarchy, by household income, August 2017
Half of consumers still see debt in a negative light, no matter the type
Figure 2: Belief taking on debt is a bad decision, by parental status and age of children in home, August 2017
Nearly half of consumers significantly stressed by their debt
Figure 3: Debt causing stress, by age, August 2017
The opportunities
More than a quarter of consumers continue to accumulate additional debt
Figure 4: Increase in debt vs prior year, by age, August 2017
Hispanic, Black consumers more concerned about remaining debt amount
Figure 5: Debt priorities, by race and Hispanic origin, August 2017
What it means
THE MARKET WHAT YOU NEED TO KNOW
Mortgages and student loans comprise the largest portions of consumer debt
Outstanding consumer credit keeps rising
Consumer credit card balances reach more than $630 billion
Debit card use considered a good way to stay out of debt
MARKET BREAKDOWN
Outstanding consumer credit continues upward trajectory
Figure 6: Revolving consumer credit outstanding, 2012-16 and Q2 2017
Figure 7: Nonrevolving consumer credit outstanding, 2012-16 and Q2 2017
Mortgage debt takes up largest portion of overall consumer debt, followed by student loans
Figure 8: Total consumer debt by debt type, Q2 2017
Mortgage debt has grown just more than 1%
Figure 9: Consumer mortgage debt, 2012-Q2 2017
Student loan debt surpasses $1.3 trillion
Figure 10: Total student loan debt, Q1 2012-Q2 2017
Number of auto loans increased by almost a third
Figure 11: Number of auto loans, Q4 2011-Q4 2016
Consumer credit card balances total more than $630 billion
Figure 12: Total number of consumer credit cards and outstanding balances, 2012, 2015
MARKET FACTORS
Un- and underemployment remain low
Figure 13: Un- and underemployment, January 2015-September 2017
Household income rises as unemployment remains unchanged
Use of debit vs credit
Figure 14: PayPal Cash Mastercard email, October 2017
KEY PLAYERS WHAT YOU NEED TO KNOW
Consumers continue to add on to their debt
Startups aim to break traditions of lending and budgeting
Consumers are struggling to make debt payments each month
New regulation hopes to curb predatory lending in payday loans
Chases new mobile bank hopes to add emotion into banking
WHATS HAPPENING?
Nearly four in 10 young consumers continue to accumulate additional debt
Figure 15: Amount of debt compared to a year ago, by age, August 2017
Figure 16: TD Bank Express Loan email, October 2017
Point wants to invest in your home, not your loan
Digit helps consumers save money without thinking about it
WHATS STRUGGLING?
More than half of consumers are unable to make full monthly debt payments
Figure 17: Debt payment habits, by age, August 2017
Figure 18: Bank of America promotional credit offer, September 2017
Most younger consumers are not budgeting for their debt
Figure 19: Use of budget to track debt, by age, August 2017
Ohio renews ban on Wells Fargo
US credit card delinquency rates continue to increase
Figure 20: Credit card delinquency rate, January 2012-April 2017
WHATS NEW AND WHATS NEXT?
CFPB releases new rules for payday lenders
Affirms new mobile app allows for quick loans for online purchases
Honeydue, the couples money manager
Finn by Chase
THE CONSUMER WHAT YOU NEED TO KNOW
More than half of consumer owe secured debt
Credit card, student loans are more prevalent unsecured debt
Less than half of consumers can completely pay off monthly debt payments
Young consumers have more debt now than a year ago
Paying down debt is a financial priority for most
SECURED DEBT OWNERSHIP
More than half of consumers own secured debt
Figure 21: Secured debt ownership, August 2017
Older men and women more likely to have secured debt
Figure 22: Secured debt ownership, by age and gender, August 2017
Mortgages and Home Equity
Figure 23: Mortgage and home equity ownership, August 2017
Black consumers are least likely to take out home equity or have a mortgage
Figure 24: Mortgage and home equity ownership, by race and Hispanic origin, August 2017
Auto loans
Auto loan, mortgage ownership related to age, life stage
Figure 25: Mortgage and auto loans, by age, August 2017
Figure 26: BFSFCU auto loan email, October 2017
UNSECURED DEBT OWNERSHIP
Credit card, student loan debt most prevalent among consumers
Figure 27: Unsecured debt ownership, August 2017
Credit card debt increases as student loan debt is paid down
Figure 28: Unsecured debt ownership Student loan and credit card debt, by age, August 2017
USE OF CREDIT
Consumers most likely to add to their debt for large purchases
Figure 29: Use of credit vs cash/check, August 2017
Credit is used for every day, while loans are preferred for car purchases
Figure 30: Use of credit vs loan, August 2017
Hispanic Millennials twice as likely to take out a loan for unexpected payments
Figure 31: Use of credit vs loan for unexpected large purchase, by Hispanic origin and generation, August 2017
DEBT PAYMENT HABITS
Less than half of consumers pay their debt in full each month
Figure 32: Monthly debt payment, August 2017
Lower income consumers more likely to budget for debt payments
Figure 33: Budgeting for debt, by household income, August 2017
Young consumers more likely to only pay the minimum on their credit card
Figure 34: Paying the minimum balance on credit card debt, by age, August 2017
Younger consumers burdened with more debt than a year ago
Figure 35: Increase in debt vs prior year, by generation, August 2017
DEBT PRIORITIZATION
Consumers keep repayment costs in mind when prioritizing debt
Figure 36: How consumers prioritize debt payments, August 2017
Figure 37: Quicken Loans mortgage review email, October 2017
Hispanic, Black consumers more concerned about remaining debt amount
Figure 38: Debt priorities, by race and Hispanic origin, August 2017
ATTITUDES TOWARD DEBT AND CREDIT
Consumers see a debt hierarchy
Figure 39: Debt hierarchy, by household income, August 2017
Paying down debt is a financial priority for most
Figure 40: Confidence in paying off debt, August 2017
Half of consumers still see debt in totally negative light
Figure 41: Belief taking on debt is a bad decision, by parental status and age of children in home, August 2017
APPENDIX DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

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