Page 16 - IAV Digital Magazine #570

iAV - Antelope Valley Digital Magazine
Total Household Debt Reaches New High, Federal Reserve Bank of New York Reports
by Dee Dee Gatton | The National Desk
WASHINGTON (TND) — Total household debt has
reached more than $17 trillion in the first quarter of this year, according to the Federal Reserve Bank of New York.
Financial experts say they’re not surprised Americans increased debt across nearly all categories.
“This number should not be shocking, especially since inter- est rates have almost doubled over the last year," said financial advisor Danielle Lucht.
The Federal Reserve Bank of New York report shows bal- ances are $2.9 trillion higher than at the end of 2019.
“In order to pay for my schooling, I didn’t want to get super behind with loans, so I just started doing
anything I could on the side," said Lauren Jack, who says she's working more than one job to make ends meet.
The report shows Americans increased debt across nearly all categories including for student loans, auto loans, mort- gages, and home equity lines of credit.
“In my professional
opinion, I like home equity loans versus home equity lines of credit,” Lucht said. “A loan, you are locking in an interest rate, a certain period of time, and you’re paying down principal and interest at a very fast rate. On a home equi- ty line of credit, you pay revolving interest every month.”
As the Federal Reserve continues to
raise interest rates, Lucht says, debt is costing Americans more each month.
As some turn to credit cards, the data for the first quarter shows credit card balances were flat, but Lucht believes personal debt is going to be on the rise.
“What we’ve seen so far with credit card debt is with COVID
you saw some people take their stimulus checks and actually pay down debt. People weren’t able to spend, so they either home improve- ments or they paid down debt, so we haven’t seen debt, really personal debt in the form of credit cards rise over the couple of years because of the impact of COVID," she said. “We’re going to start to see personal debt rise again because of interest rates."
Lucht told The National Desk that if you’re looking for a place to put your money, consider a high-yield savings account. She says the interest you make could help offset some of the inflation.
If you don’t need the money for a year or so, Lucht says, a CD could be another option.
iAV - Antelope Valley Digital Magazine