As Consumers’ Debt Burdens Rise, Government Agencies Have Opportunities to Better Assist Them with Key Services

TransUnion analysis identifies three core groups of constituents and ways the public sector can provide differentiated support for each

CHICAGO, April 30, 2024 (GLOBE NEWSWIRE) -- U.S. consumers’ median minimum monthly debt payments grew by 32% between 2020 and 2023 – surpassing the rate of inflation (18%) during the same time. As consumer debt obligations continue to rise, a new TransUnion (NYSE: TRU) public sector study explores ways government agencies can better assist their constituents.

The study, “Navigate New Consumer Financial Strains: How Government Agencies Can Strengthen Customer Experiences,” included both TransUnion consumer credit and Bureau of Labor Statistics data from December 2020 to December 2023.

“There are a host of economic conditions, like inflation and higher interest rates, that are making life increasingly difficult for consumers,” said Jeffrey Huth, senior vice president and head of TransUnion’s public sector business. “Financial stress can often lead to constituents needing access to critical government programs, so it is crucial agencies identify people who are struggling and reach out with appropriate information and support.”

While increases to minimum monthly payments are concerning, the report highlights disparities among several key demographic groups, based on generation, homeownership and geography.

Minimum monthly debt payment growth from 2020 to 2023

Ages 18 to 29	Grew by 74%	Ages 60+	Grew by 11%
Renters	Grew by 54%	Homeowners with mortgages	Grew by 31%
Urban	Grew by 35%	Rural	Grew by 25%

The report identifies three core groups of consumers based on their financial standing that government agencies must be aware of: those experiencing hardship, feeling pinched and expecting the worst. It also includes recommendations for government agencies to increase and improve outreach, access to services and program integrity.

Experiencing hardship
This subset of consumers utilize existing credit at significantly higher rates compared to other consumers, suggesting they may be relying on a dwindling reserve of available credit to make ends meet. The group is also growing primarily in zip codes with the lowest deciles for median household income, and is the most in need of services and support.