Here’s a meaty set of charts to include in your Types of Credit unit. I love it because it provides a more holistic view of the various types of debt that consumers have and how their balances vary over an adult’s life:

Hat tip to Sarah Tavel of Greylock Partners who included this chart in her excellent presentation “Saving people money.”

First, some orientation is in order.

The charts show various types of debt: mortgage, HELOC (home equity line of credit), student loan, credit card and auto. Importantly, the mortgage debt has a scale on left side (up to $60,000) while other debts have scale on right side (up to $12,000). The curves for the individual debts reflect how the average amount of debt outstanding by age. The left chart describes the situation in 2003 with the right side reflecting data from 2015. Phewww…now for some questions.

1. What is the largest debt for each period of time? How does the shape of that specific debt’s curve change between 2003 vs. 2015?
2. Which type of debt shows the  most significant change between 2003 and 2015? Describe at least three differences that you see with this debt between the two periods (e.g., amount of debt, shape of curve)
3. How would you describe the changes in credit card debt between the two periods for 20-30 year olds?
4. Rank order the debts from largest to smallest for 20 year olds in 2015.
5. Would you consider some debts better than other debts? Explain.
6. What do you think will be impact of consumers carrying higher student debt balances later into their 30s and 40s?
7. What additional information might be helpful when reviewing this chart?
   1. I was thinking specifically the percentage of consumers that carry this type of debt at each age level and the median value for those who have the type of debt. Just don’t ask how I would graphically display it:)

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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