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Analyzing Credit Trends by Age: Part Two

In my last post, I shared research showing how older consumers have been increasing their debt loads, while younger consumers were doing the opposite. This post will dig deeper, looking specifically at credit trends by both age and loan type. 


The graphic above summarizes the average outstanding debt for each age group by debt type. Of note:

  1. Student loan debt is consistently higher for all age groups. This is no surprise given the rising cost of education over the last few years. Understandably, younger consumers have much higher levels of student loan debt. Some of the growing student loan debt for the older age groups may be explained by these consumers going back to school or parents co-signing loans for their children.
  2. The magnitude of deleveraging is inversely related to age. That is, the younger the age group, the greater the relative change in outstanding debt level across all types of debt, except student loans.
  3. All age groups reduced their outstanding credit card debt. The younger the age group, the greater the reduction in debt. One reason why older consumers may not have reduced their card debt as much is that some may have been forced into early retirement, and thus did not have a nest egg large enough to handle the transition.
  4. Older consumers increased their outstanding auto and mortgage debt. It’s possible these consumers took advantage of low interest rates and low home prices to purchase investment and vacation properties. 

Of course, this is only a high level analysis of what’s changing, and within each age group, there will be exceptions to the rule. Still, these findings underscore important changes in debt usage and credit behavior trends. They are a reminder that the credit landscape can be dynamic, and as a result, lenders must continuously track such changes and evolve their product offerings accordingly to remain relevant. 

Stay tuned for my next credit trends post, where I'll take a closer look at how younger consumers are rapidly changing their attitudes towards credit.

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