(CNSNews.com) -- A report released last week by the Pew Charitable Trusts found that nearly 7 out of 10 Americans (69 percent) view non-mortgage debt as a “necessity in their lives” -- albeit an unwanted one.
According to the authors of the report, “these findings suggest an uneasy comfort with debt -- a sense that it is needed and possibly even advantageous -- but is still not desired.”
“One of the biggest shifts in American families’ balance sheets over the past 30 years has been the growing use of credit and households’ subsequent indebtedness,” Pew reports, noting that “this rise in debt has not corresponded to a similar increase in household income.”
“Even middle-wealth households held over $7,000 more debt, on average, in 2013 than in 2001 and previous years,” according to the report.
Only 1 in 5 Americans said that “no amount of debt is worth it, regardless of opportunities it might offer,” while 68 percent said that loans and credit cards allowed them “to make purchases or investments that their income and savings alone could not support.”
The report indicates that most Americans demonstrate a distinct difference between the way they view debt in their own lives and in the lives of others, with 79 percent agreeing that others “use debt irresponsibly.”
Only 20 percent of Americans are free from any form of debt. The most common variety is mortgage debt (44 percent), followed by unpaid credit card balances (39 percent), car loans (37 percent), and student loans (21 percent).
However, the type and the amount of debt are greatly influenced by age and state in life. Nearly 9 out of 10 Gen-Xers - Americans born between 1965 and 1980 - hold some form of debt, with 56 percent of them owing money on a mortgage.
Forty-one percent of millennials (those born between 1981 and 1997) are starting their working lives with unpaid student loans.
Even many older Americans still have unpaid debt. Among those born between 1928 and 1945, 90 percent report being retired, and yet 56 percent of these retirees hold some form of debt.
According to the report, “because most older Americans are not eliminating debt before retirement, they may be at greater risk of financial insecurity in their golden years.”
The relationship between debt and financial security also depends on age. “For older Americans, lower levels of debt indicate greater financial security, especially because they are most likely to be living on a fixed income,” the report noted.
However, among Americans of working age, those “with higher incomes and net worth have more debt but also healthier balance sheets overall.” The study’s authors attribute this to affluent Americans having “greater access to sustainable forms of credit.”
The report, which was released on July 29, uses data from The Pew Charitable Trusts’ Survey of American Family Finances, which was collected in November and December 2014, and from the Federal Reserve’s 1989-2013 Survey of Consumer Finances.