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Americans have less personal debt than they did before the pandemic, according to data showing the average adult owes a little under $22,000.
Research from financial services company Northwestern Mutual found that excluding mortgages, the average personal debt per individual sat at $21,800 in 2023, significantly lower than the $29,800 recorded in 2019.
At the same time, Americans have wildly different experiences with their debt: While more than a third of Americans said they’re carrying their highest level of debt ever, an even greater share reported the opposite. The latest New York Federal Reserve data also shows that rising credit card debt and auto loans helped push U.S. household debt to new records in the fourth quarter of 2023.
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Average debt levels
Northwestern Mutual and the Harris Poll interviewed 2,740 U.S. adults online between mid-February and early March of 2023. Here are some of the findings:
- Despite persistently high inflation in recent times, the study showed average personal debt among U.S. adults, not including mortgages, has dropped steadily over the past four years.
- The average American in 2023 carried $21,800 in personal debt (excluding mortgages), a whopping $8,000 less than what Northwestern Mutual recorded in 2019.
- Personal debt for many Americans is decreasing: 43% percent said they have the lowest or close to the lowest debt they’ve ever carried.
- However, 35% of Americans reported that they’re in the most debt of their lives. New York Fed data shows that U.S. household debt swelled to $17.5 trillion last quarter, with credit card balances making up about $1.13 trillion of it — a new high for credit card debt.
- Unsurprisingly, younger generations struggle the most with student loan debt, the Northwestern Mutual study found: 5% of survey participants overall said personal education loans were their top source of debt. That percentage increases to 17% for Gen Z and 10% for millennials.
- Those with personal debt said on average that 30% of their monthly income goes to paying it off.
- Nearly half (49%) of survey respondents said they expect to pay off their debt within one to five years, while 39% expect it to take longer — perhaps even a lifetime.
Top sources of personal debt
Credit cards are the main source of debt for U.S. adults, accounting for more than double any other source cited by survey respondents.
- Credit cards (28%)
- Car loans (12%)
- Medical debt (7%)
- Home equity loans / lines of credit (6%)
- Personal education loans (5%)
- Educational expenses for children or family members (3%)
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Progress on paying off debt
Americans have been making consistent progress when it comes to paying off their debts, according to the survey, even reducing what they owe over the course of a period of historic inflation. While the report didn't explore how Americans are paying down debt, the data shows the average debt per individual declined the most (by $6,475) between 2019 and 2021. By comparison, debt per individual dropped by $1,525 between 2021 and 2023.
During those early pandemic years, many workers grew their savings and eliminated debt by spending less money, working remotely and stashing away their stimulus checks. In surveys, many people say they used their stimulus checks for savings or paying off debt.
Even though the report suggests Americans are reducing their debt overall, that doesn’t mean everyone’s circ*mstances are alike, as shown by the survey’s divide between those who say they owe the most or least debt ever.
In fact, U.S. household debt grew by $16 billion between April and June of 2023, according to the New York Fed, driven in large part by high interest rates on credit cards: The average credit card APR now sits at more than 20%. Auto loan balances also increased by $20 billion in that time thanks to inflation and high interest rates. Delinquencies related to credit card debt and auto loan debt have been rising recently as well.
Regardless, Americans should do their best to stick to their repayment strategies to continue the trend of consistent declines in debt levels recorded by the Northwestern Mutual study.
"It can be a slippery slope between manageable debt and runaway debt, so it's an important time to remain extra vigilant about planning and spending," Christian Mitchell, chief customer officer at Northwestern Mutual, said in a news release.
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FAQs
The average debt an American owes is $104,215 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans.
How much debt does the average American have? ›
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
How much credit card debt is normal? ›
Average Credit Card Balance by Generation
| Generation | Average Credit Card Debt |
|---|
| Generation Z | $3,262 |
| Millennials | $6,521 |
| Generation X | $9,123 |
| Baby boomers | $6,642 |
1 more rowMar 12, 2024
For example, according to the Census Bureau, fewer than 28% homeowners below retirement age have paid off their homes completely, as opposed to almost 63% of those 65 or older.
What percent of Americans are debt free? ›
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
What percent of Americans live with debt? ›
Even though household net worth is on the rise in America (at $141 trillion in the summer of 2021)—so is debt. The total personal debt in the U.S. is at an all-time high of $14.96 trillion. The average American debt (per U.S. adult) is $58,604 and 77% of American households have at least some type of debt.
Are 80% of Americans in debt? ›
According to financial experts, the percentage of Americans in debt is around 80%. 8 in 10 Americans have some form of consumer debt, and the average debt in America is $38,000 not including mortgage debt. Owing money just seems to be a way of life for Americans, as collectively we have $14 trillion in debt.
How many people have $50,000 in credit card debt? ›
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
What is the average credit score in America? ›
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850. The higher your score, the better.
Is 5000 credit card debt a lot? ›
$5,000 in credit card debt can be quite costly in the long run. That's especially the case if you only make minimum payments each month. However, you don't have to accept decades of credit card debt. There are a few things you can do to pay your debt off faster - potentially saving thousands of dollars in the process.
The number of mortgage-free, single-family homes and condos increased by 7.9 million from 2012 to 2022, to 33.3 million, according to Census Bureau data analyzed by Bloomberg. As baby boomers age, they're snapping up—or holding on to—a larger share of homes overall.
Do most millionaires pay off their house? ›
Not only is there huge freedom in being completely debt-free and living in a paid-for house, but it's also a great way to build wealth—getting rid of your house payment leaves you with a ton of extra money each month to save for retirement. In fact, the average millionaire pays off their house in just 10.2 years.
How many Americans have no mortgage? ›
The number of mortgage-free homes in the U.S. soared by 7.9 million from 2012 to 2022, reaching a total of 33.3 million, per the report.
Which gender has more debt? ›
Women are stereotypically seen as irresponsible spenders, but the data doesn't back this up. According to a 2019 Experian study, men carry more debt than women across nearly all categories, including credit card debt — the study found that men have $125 more in credit card debt than women on average.
How many people are 100% debt free? ›
What percentage of America is debt-free? According to that same Experian study, less than 25% of American households are debt-free. This figure may be small for a variety of reasons, particularly because of the high number of home mortgages and auto loans many Americans have.
Which generation has the most debt? ›
Key statistics
- People aged 40-49 hold the highest amount of debt with $4.21 trillion in total.
- By 2030, Millennials (born between 1981 to 1996) are expected to have the most total debt at an average of $228,891 per person.
Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment.
How much does the average person pay in debt? ›
Americans are tumbling deeper into debt, with the typical household paying $1,583 a month on various loans, a recent study found. That's a more than $300 increase from people's average monthly debt payment in 2020, according to LendingTree.
How much money do 30 year olds have? ›
According to CNN Money, the average net worth in 2022 for the following ages are: $9,000 for ages 25-34, $52,000 for ages 35-44, $100,000 for ages 45-54, $180,000 for ages 55-64, and $232,000+ for 65+. In 2024, the figures are likely 10% higher. Thee figures seem low. But that's because the age range is large.
