27+ Consumer Debt Statistics that Highlight America’s Debt Crisis
The Great Recession of 2008 not only hindered the borrowing power of US citizens, but also delivered a huge blow to consumer confidence in the banking system. As the recession was fading, loan and credit-line graphs have begun to rise again. And as millennials finally move out of their parents’ homes, the housing market has recovered from its slump.
This positive atmosphere has also led people to embark upon reckless and ill-considered financial strategies. The average American household debt is now more than double what the average household earns in a year. At that rate, it’s likely that many families will spend decades trapped in a debt cycle. The effects of recent pandemic outbreak are yet to be fully recognized.
In the wake of this crisis, we’ve compiled some illuminating stats that highlight just how severe the average US debt problem has become across all loan and credit line types. To make this list, our experts have researched the topic thoroughly and included statistics only from the most credible sources.
We hope this information helps you think about debt in a more constructive way. When it comes to improving the efficiency of managing your debt, our blog post on world's best budgeting apps can also be helpful.Watch our latest video on the best debt payoff methods:
Consumer Debt Statistics – Editor’s Choice:
- In total, US household debt – mortgage and non-mortgage included – is approximately $14.3 trillion.
- Household consumer debt is worth 75.4% of the United States GDP.
- Credit cards and mortgages account for about two thirds of the total American consumer debt.
- The average American with an auto loan debt owes $19,321.
- US personal loan debt rose from $46 billion in 2011 to more than $150 billion by the end of 2019.
- Student loans have the highest percentage of delinquent debtors.
- 15% of US citizens think that they’ll be in debt for their entire lives.
The total outstanding debt among American consumers is $4.2 trillion as of Q1 2020, not taking mortgages into account.
Outstanding debt refers to the total amount of money owed, taking both the amount borrowed and accrued interest into consideration. The situation is getting worse; from $3.4 trillion in Q1 2016, consumer debt at the end of 2019 amounted to more than $4 trillion.
United States household debt – mortgage and non-mortgage included – rose $155 billion by the first quarter of 2020. It now amounts to approximately $14.3 trillion.
(Federal Reserve Bank of New York; Experian)
That’s a 1.1% rise. For example, when you compare that to the 0.3% rise from Q3 to Q4 of 2018, you can’t help but notice a dramatic acceleration. What’s even scarier is that the last quarter of 2019 is the 22nd consecutive quarter in which total US household debt has gone up. It’s now $2.3 trillion higher than its previous Great Recession peak in 2009.
The total revolving US consumer debt stood a little over $1 trillion in February 2020.
(Federal Reserve; Lexington Law)
That amounts to $3,299 in revolving debt per US citizen. Revolving debt involves paying a different amount each month and borrowing against variable interest rates. The amount you pay depends on how much money you spend that month. So, if you borrow $400 one month and you pay back $50, you can immediately re-borrow (or revolve) the $50.
Sound familiar? That’s because your credit card uses the revolving debt model. Credit card debt statistics and studies show that, unfortunately, many Americans still don’t understand the risks of using a credit card and not paying their bills on time.
The total revolving debt for American consumers has been rising on a yearly basis, from $888 billion in 2014 to more than a trillion dollars in 2020.
The total non-revolving consumer debt of US citizens is now $3.12 trillion.
Non-revolving debts are paid off in fixed monthly installments. This is usually the case with bank loans. Consumers can often choose between fixed and variable interest rates.
The total non-revolving debt among US consumers has gone up more than 20% since 2015, from $2.5 trillion to $3.1 trillion in 2020.
The average debt per person in America is $26,621.
(Northwestern Mutual; Markets Insider)
At the end of 2017, more than half of Americans said their goal for the next financial year would be debt reduction. Despite that, the average American debt had risen by around $1,000 by the end of 2018.
However, the total average debt has declined over the last two years; from around $38,000 in 2018 to $29,800 in 2019 to just over $26,600 in 2020.
Household consumer debt is now worth 75.4% of US GDP.
Household debt statistics show that the ratio was at its highest in the fourth quarter of 2007, when consumer debt rose to 98.6% of the country’s GDP.
Historically, this figure was at its best in 1952, when consumer debt was worth just 23.8% of US GDP. From that point until 2018, the average was 58.35%.
The average American debt to income ratio shows that many US households live above their means.
Back in 2017, the average household owed $137,063 (including mortgages, loans, and revolving credit), yet the median annual income was just $59,039. This shows that many Americans live beyond their means.
Repaying the average household debt has been made all the more difficult by the rising cost of living, which has gone up 30% in a 13-year period, compared to a 28% increase in incomes. Medical costs have shot up 57% since 2003, while food and housing costs have risen by approximately a third.
Of the homes that had debt, the average debt per household in America is $137,063 (including mortgages, loans, and revolving credit) in 2018.
Progress can be slow when paying off credit card debt, although any expert would advise you that it’s as good a habit as brushing your teeth.
Households with revolving debt pay $1,162 annually in credit card interest alone. Some households struggle to reduce their debt, as their expenses and interest – outweigh their income.
Two out of 10 Americans in debt say they allocate more than 50% of their monthly income to debt reduction.
On top of that, 13% of Americans believe they’ll be indebted for the rest of their lives. The average consumer debt (not counting mortgages) is $38,000, and 40% of Americans believe they will still have to work when they are 70 years old.
Only 17% of Americans have between $5,000 and 20,000 in savings, while twice as many are indebted by that amount.
Consumer debt levels are alarming: according to the last available data, only 23% of people said they have no debt, 4% less than previous year.
The American people owe $1.27 trillion to the federal government.
This number includes student loans from the Department of Education under the Federal Direct Loan Program and the Perkins Loan Program.
Depository institutions, savings institutions, and commercial banks are the major holders of US consumer debt. In total, 40% of the national consumer debt ($1.6 trillion) is owed to these sources.
Discretionary expenses such as dining, nightlife, leisure, travel, and hobbies take up 37% of Americans’ income.
It seems US citizens are used to spending their disposable income on themselves. While 36% of income that doesn’t cover bills and food goes toward debt reduction, 15% is spent on nightlife and dining, consumer statistics show.
The vast majority of Americans (87%) say financial security and stability are the main prerequisites to a positive outlook on life.
Money may not be the key to happiness, but it seems US personal debt can easily be a source of misery. Half of all Americans say their finances often cause them to feel anxious, insecure, and afraid. A quarter say the issue makes them feel unpleasant “all the time.”
The total consumer debt – mortgage and non-mortgage combined – in Canada reached $2.25 trillion in the 2nd quarter of 2019.
Consumer credit and non-mortgage loans amounted to $782.9 billion, while mortgage debt was just short of $1.47 trillion. That’s nearly $60,000 in debt per capita for Canadians, compared to the figure of $26,621 in US debt per person. To make the comparison fair: 60,000 Canadian dollars is about $46,000 in American funds.
Credit cards and mortgages combined account for about two-thirds of total American consumer debt.
Credit card debt has grown 6% since 2017 and now comprises 33% of consumer debt. Car loans account for 9%, while student loans amount to about 8% of overall debt.
Student loans are, as you’d expect, one source of personal debt that affects millennials above all others. When it comes to citizens aged 18 to 24, student loans account for 37% of overall debt.
If all student loan debtors who keep their debt in forbearance paused their payments for 12 months, they would accumulate $5.72 billion debt in interest alone.
American debt statistics show that 2.7 million student loan debtors had put their payments on forbearance in Q1 2019. The last available data shows that average balance of these debts is $46,679.
Forbearance means stopping payments on your loan for a period of time with the approval of the debt holder. Of course, interest keeps accruing during this time. Debt holders usually agree to this arrangement, both because of the extra interest, and the fact that foreclosure usually works out worse for them.
The median amount baby boomers owe in non-mortgage debt is $25,187.
The generation born between 1946 and 1964 owes its name to the postwar baby boom. As they reach or settle into retirement, many are still laden with debt.
According to consumer debt statistics published by LendingTree, most of their non-mortgage debt comes from car loans (38.5%) and credit card balances (34.9%).
Baby-boomers in Houston have the largest median non-mortgage debt, at $31,626, while residents of southern-Cali town Oxnard are on the opposite side of the spectrum, with a median of $20,876 in non-mortgage debt.
Americans in debt because of a car loan owe an average of $19,321.
(LendingTree; The Ascent)
Two years ago, 113 million Americans were registered with a car loan debt. This number is second only to the number of credit card debtors: 176 million. The current outstanding auto loan balance is $1.2 trillion, with a 8.06% average interest rate.
29% of millennials find financial planning to be “exciting and inspiring.”
Maturing in the age of crisis, both economical and ecological, has made the millennial generation more conscious of the importance of planning for the future. It has also made them more generally anxious about their personal debts, with 78% of them saying they feel “pulled apart by the pressure” of managing their future and present financial responsibilities.
Despite all this, debt statistics show that millennials have the same debt on average as Generation X and baby boomers: around $36,000.
Of all loan types, student loans have the highest percentage of delinquent debtors: 11.5%.
The term “delinquent” is reserved for a debtor who fails to meet his or her payments in a timely manner.
The number of people with student loan debt in America is 42 million, 4.83 million of whom have not respected the payment schedule.
Credit card debtors have the lowest delinquency rate at 2.49%. When it comes to credit cards, the average US debt per capita is $5,800. This statistic comes from a pool of borrowers 176 million strong.
US personal loan debt has trebled since 2011, from $46 billion to $156 billion as of the 3rd quarter of 2019.
The Great Recession had a negative impact on the personal loan balance. It peaked in 2007 at $72 billion, then dropped to $46.4 billion in 2011. However, as the economy started to heal and consumers regained faith in their ability to repay their debts, personal loans have since risen to new heights. Now they are the fastest-growing consumer loan product.
Most personal loans (61%) are taken for debt management.
The average debt per US citizen is $26,621. It’s no wonder, then, that more than 65% of personal loans are taken for debt consolidation or credit card refinancing. Experts don’t recommend taking out a loan to refinance your credit card debt if the total amount of debt is more than half of your annual income.
The average American credit card debt is $6,194.
Iowa has the lowest average credit card debt. This figure is 29% lower than the national average: $4,774. Wisconsin, Mississippi, Kentucky, and West Virginia take up the next four places on the list.
Alaska sits uncomfortably at the other end of the spectrum. The largest state is an outlier, with an average credit card debt of $8,026.
When looking at average credit card debt by age, Generation X and baby boomers lead the way with over $7,500 per person.
This should come as no surprise. After all, these generations have more dependents and a higher disposable income than others. Millennials owe an average of $4,315 on their credit cards, while those born after 1997 owe an average of $2,047.
Having children increases the likelihood of credit card debt: 51% of families with children owe money on their credit cards, compared to 42% of families without children.
Household debt statistics show that families with children also pay a higher annual credit card interest rate than average: $1,356 compared to $1,141.
Credit card users who carry a balance on their card – also known as revolvers – account for 43% of credit card users.
(American Bankers Association)
Not all people use their credit cards the same way. The ABA recognizes three types of credit card owners: revolvers, transactors, and dormants.
Transactors use their cards to make payments, but scrupulously pay off the balance each month. They use credit cards to boost their credit rating while also enjoying the perks such as cash back rewards and avoiding the interest. According to US debt statistics, transactors make up 31.9% of all credit card users. Dormants don’t use their credit cards often, making up 24.0% of the user base.
Revolvers are the real troublemakers, carrying a balance on their accounts and suffering the pain of interest rates. The more revolvers there are, the less healthy the debt economy is. Consumer debt statistics show that their numbers didn't change significantly over the last three years; their share is 44.1% of all credit card users.
The portion of Americans who believe they'll be in debt for the rest of their lives is 15%.
Almost half of the Americans feel anxiety because of debt at least once a month, and 35% are feeling guilty for the same reason.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
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