What is the debt of the average American in their forties?

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Considering that Gen Xers are downright middle-aged – this generation was born between the mid-1960s and 1980s – it’s not all that surprising that they have the highest household. debt according to The data of Experian. After all, they’re probably busy juggling kids, aging parents, mortgages, car loans, and all the different costs associated with adulthood.

According to the Experian Credit Status 2020 report, the average Gen X consumer has about $ 32,878 in non-mortgage debt, as credit card, student loans, auto loans and / or personal loans. Gen X homeowners have an average mortgage balance of $ 245,127.

Millennials are right behind them, with $ 27,251 in non-mortgage consumer debt and $ 232,372 in mortgage debt, and their debt is growing at the fastest rate of any generation.

Here’s a full look at Experian’s results for 2020:

Credit Status Results in 2020

2020 results by generation Generation Z (24 years old and under) Millennials / Gen Y (25 to 40 years old) Gen X (41 to 56 years old) Boomers (57 to 74 years old) Quiet (75 years and over)
Average VantageScore® 654 658 676 716 729
Average number of credit cards 1.64 2.66 3.3 3.45 2.78
Average credit card balance $ 2197 $ 4,651 $ 7,718 $ 6,747 $ 3,988
Average renewable utilization rate 30% 30% 32% 24% 13%
Average number of retail credit cards 1.64 2.1 2.59 2.63 2.21
Average retail credit card balance $ 1,124 $ 1871 $ 2353 $ 2100 $ 1558
Average non-mortgage debt $ 10,942 $ 27,251 $ 32,878 $ 25,812 $ 12,869
Average mortgage debt $ 172,561 $ 232,372 $ 245,127 $ 191,650 $ 159,517
Average late payment rate of 30 to 59 days 1.60% 2.70% 3.30% 2.20% 1.20%
Average late payment rate of 60 to 89 days 1.00% 1.50% 1.80% 1.20% 0.70%
Average late payment rates of 90 to 180 days 2.50% 4.40% 5.30% 3.20% 1.90%

How to ease the debt burden

Debt is a reality that most Americans live with. Some have higher debt tolerances, which means they are more comfortable taking on large loans and / or paying off their debts over several years in order to achieve the quality of life they desire.

Although people learn to live with consumer debt, it can be very costly when you take the time to consider the interest charges you are paying month after month. Mortgages and student loans often have more reasonable APRs, but credit card interest charges can add up quickly.

Consumers of all ages can make their debt more manageable in a number of ways, allowing you to focus on savings.

Consider these good financial habits to prevent debt from being your fall into your 40s and 50s.

1. Save for early retirement

Every financial advisor will tell you to start saving for retirement in the twenties. But if you’re late to hit them major savings targets, don’t let that put you off. It’s never too late to start saving, you may need to be more aggressive.

To maximize your retirement investments, consider using a credit card that allows you to invest your rewards. Annual fees Fidelity® Rewards Visa Signature® card offers account holders 2% cash back on all qualifying expenses that can be deposited into up to five Fidelity accounts, including IRAs. According to Fidelity Cash Back Calculator, charging $ 1,800 per month to your Fidelity Rewards Visa Signature card could result in $ 432 in cash back in one year and $ 19,312 more in your investment portfolio over 20 years.

Learn more about the best credit cards to invest in rewards.

Don’t miss: Here’s how much money you should have saved at each age to retire at 67

2. Prepare for your children’s college while they are young

Consider contributing to a Plan 529 starting when your children are still small. These plans offer tax-free withdrawals when money is withdrawn to pay for college education, both saving you money and helping you plan ahead.

Pair this strategy with a credit card that lets you transfer your money to a college fund to further maximize your savings. the Upromise® Mastercard® offers 1.25% cash back on every qualifying purchase, and you can link your card with a qualifying 529 College Savings Plan to potentially earn 15% more on the money you deposit.

3. Sign up for a checking account that earns you money

Although you can earn up to 6% cash back with the best credit cards, there are also a few checking accounts that allow you to earn money with your debit card. the Discover the Cashback debit account is a good option for those who want to take their debit card to go the extra mile. You can earn 1% cash back on up to $ 3,000 in debit card purchases each month, which equals $ 30 cash back per month and $ 360 per year.

This extra money could help you pay for the gifts and avoid the holiday debt hangover it’s all too common at the start of every new year.

The Discover Cashback debit account also has no fees or account minimums, so you won’t waste extra money just to have a bank account.

Don’t miss: Get a head start on vacation savings with these helpful tips

At the end of the line

While Gen X consumers have the most debt of any generation, they also have the highest average credit score. The average VantageScore for Gen X is 676, which is just above the threshold for preferential credit. This means Gen X can still benefit from affordable loans and better credit cards.

If you want to take strong action to get your consumer debt under control, some credit cards and personal loans can help. Just make sure you have a clear repayment plan so you don’t fall back into a cycle of debt.

Fidelity® Rewards Visa Signature® and Upromise® Mastercard® information was independently collected by CNBC and was not reviewed or provided by the card issuer prior to publication.

Editorial note: The opinions, analyzes, criticisms or recommendations expressed in this article are those of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

About Norman Brown

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