Lauderdale, we found that community members are struggling with debt, even though nearly all are employed. That leaves Black communities with fewer good options for acquiring credit, such as payday loans.įrom interviews conducted in Baltimore, New York City and Ft.
We also found that just 40 percent of Black households reported having good or very good credit, compared to 65 percent of White households. Lauderdale to better understand how their clients manage debt and how that debt impacts their day-to-day lives.Īt the national level, more than 27 percent of Black households are late on paying their debts, compared to 15 percent of White households, even though Black median debt ($30,800) is about half of White median debt ($73,800). We have also been working with services in Baltimore, New York City and Ft. In response, Prosperity Now has worked to not only better grasp how much debt is owed by communities of color-specifically Black communities-but also develop a deeper understanding of how debt is a both a cause and a consequence of the racial wealth divide. While it can certainly open several doors to greater economic mobility, that mobility often runs up against the unfortunate reality that communities of color often take on greater debt and see a lower return on their investments. We know “bad debt” such as a predatory loan can be devastating, but for communities of color, even “good debt” is often a double-edged sword. Many people take on debt for good reasons, such as buying a home and pursuing higher education-two key building blocks for economic mobility.Įven when macro-level studies elevate important details like these, they often fail to distinguish how economic issues such as debt play out differently across different communities, especially in the context of race. While this assessment is mind-boggling, studies like these that focus on collective sums and average figures tend to overlook important dynamics that occur beneath the headlines.
Putting this astronomical total into greater context, NerdWallet estimates that if our cumulative debt was split evenly between the 126 million households in the country, each one would owe $135,000 on average. That’s an almost 10 percent increase from just three years ago. NerdWallet finds that by the end of 2018, the collective total debt owed by Americans -including mortgages, credit cards, student and auto loans - stood at more than $13.5 trillion dollars. 1 Million BIPOC Entrepreneur InitiativeĪmericans are carrying a lot of debt.
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