Debt is a topic that touches nearly every American household, but the true scale of it can be surprising. In recent years, the average American debt has grown due to rising costs of living, increased reliance on credit cards, and higher education costs.
Here’s a closer look at the numbers and what they reveal about where you might stand compared to the national average.
Breaking Down the Average American’s Debt
As of 2024, the average American holds $22,713 in personal debt, excluding mortgages. This number is primarily driven by credit card balances, auto loans, and student loans.
- Credit Card Debt: In 2023, the average credit card balance per household was $6,501, up 10% from the previous year. This surge is due, in part, to inflation and the rising cost of goods, leading Americans to rely more on revolving credit to manage their daily expenses.
- Auto Loans: The average auto loan debt is around $23,000. With car prices at all-time highs due to supply chain issues and increased demand, more Americans are taking out larger loans to finance their vehicles.
- Student Loans: The average student loan debt per borrower is approximately $38,290. Student loans continue to be a significant financial burden for many, with total student loan debt in the U.S. reaching $1.6 trillion.
See more statistics from debt.org.
How is the debt when Mortgages are included?
When including mortgages, the total debt for the average American household jumps significantly. The average household debt, including mortgage debt, stands at approximately $101,915. This figure underscores the major role that housing costs play in American financial life, with mortgages making up the largest portion of most families’ debt.
The median mortgage balance across the U.S. was $130,000 in 2023, with many borrowers owing more depending on their location and the size of their loan.
Are You Above or Below the Average American Debt Line?
To assess whether you’re above or below the average debt line, it helps to compare your total debts with these figures:
Personal Debt (excluding mortgage): If you owe more than $22,713, you’re above the average personal debt load for Americans.
Credit Card Debt: With an average balance of $6,501, holding more than this in credit card debt may indicate you’re above average in this category.
Auto Loans: If your car loan exceeds $23,000, you’re carrying more debt than the typical American.
Student Loans: With the average debt sitting at $38,290, owing more suggests you’re carrying a heavier-than-average student debt load.
Debt can have a profound impact on your financial health, affecting everything from credit scores to your ability to save for the future. A higher debt load often means higher monthly payments, which can eat into disposable income and reduce savings potential.
For many Americans, the rising cost of living, stagnant wages, and increased reliance on credit has led to a situation where debt repayment consumes a significant portion of their income.
In 2023, 23% of Americans reported being debt-free, while the remaining majority are grappling with various forms of debt, whether it’s from credit cards, auto loans, or student loans.
What Can You Do About It?
If you’re above the average American debt line, it’s crucial to take proactive steps to manage and reduce your debt. Here are a few strategies:
- Create a Debt Repayment Plan: Focus on paying off high-interest debt first, such as credit cards, while making minimum payments on other loans.
- Consolidate Debt: Consider consolidating high-interest debts into a single loan with a lower interest rate to reduce monthly payments.
- Budgeting: Create a realistic budget that prioritizes debt repayment while ensuring you have enough for essentials.
- Seek Professional Help: If you’re overwhelmed, consider working with a credit counselor or financial advisor to create a personalized plan to reduce your debt.
Bottom Line
The shocking truth about the average American debt is that it continues to climb, with many individuals carrying significant balances across credit cards, auto loans, student loans, and mortgages.
Whether you’re above or below the average debt line, understanding where you stand can be a powerful step toward taking control of your financial health. By creating a strategic plan to manage and reduce your debt, you can work toward a more secure and debt-free future.
