Household debt in the U.S. increased slightly in all loan categories except for credit card debt during the first quarter of 2017, according to NerdWallet research. Credit card debt decreased by almost 2%, or more than $300, per household. Mortgage debt had the most significant change this quarter, increasing by 2.15%, or almost $4,000, per household.
Average balance for households with each type of debt:
|Q4 2016||Q1 2017||Change|
|Any type of debt||$134,643||$135,924||0.95%|
“We often see a drop in credit card debt in the first quarter as people work to meet their New Year’s goals and in some cases put extra money toward those efforts,” says Kimberly Palmer, NerdWallet’s credit cards expert. “At the same time as they are paying off credit card debt, the numbers show that people are taking on loans to help them meet long-term goals, such as homeownership. Overall, that generally spells good news for consumers, since mortgages tend to be low-interest debt on a useful, and in some cases appreciating, asset.
“For those consumers trying to get their finances on track for the year, it’s usually a good idea to prioritize paying off any high-interest credit card debt, which often comes with interest and fees, while continuing to make steady, on-time payments on other forms of debt, including student loans, auto loans and mortgages. Keeping those accounts in good standing helps build a strong credit history, which in turn makes it easier to have access to lower-interest-rate loans in the future.”