Debt has always been part of American life, and a fundamental part of capitalism. It allows us to have a home, a car and go to college. But debt needs to be repaid and with the economy struggling, so too are many people with the burden of debt.
So, we have put together 29 American debt statistics everyone should know so that you can see the big picture when it comes to debt.
The definition of debt is any money that you owe to another person or entity such as a bank or other type of lender for any reason.
- Average American Debt
- Types Of Debt
- Which States Have The Most Debt?
- Getting Help
- Debt By Age Group
- Building Credit
- Student Loan Debt By Ethnicity
- Final Thoughts
Average American Debt
Personal debt in America is at an all-time high and still rising. The amount of money owed per adult in the US is $58,604 with more than three quarters of households having some form of debt.
Consumer debt rose to $14.5 trillion in the last couple of years and shows no sign of slowing. Let’s look at some types of debt.
Types Of Debt
Some of the most common forms of debt in America are mortgages, auto loans, credit cards, student loans, medical costs and home equity lines of credit or HELOC.
One of the best ways to manage your different types of debt is to use credit monitoring.
From 2020 to 2021 mortgage debt rose by more than 7.5% to $10.3 trillion. This accounts for more than two thirds of the debt that Americans owe, making it by part the largest component of consumer debt.
This is a steeper increase than in recent years with the average individual mortgage debt increasing by 5.9% to $220,380.
Thirty seven percent of American households have an auto loan. The average payment per month on a new car is $577 while for used cars it is $413.
With almost 45.5 million households purchasing their car on credit it leaves them with an average of $31,142 of debt each. Across the country that racks up to $1.42 trillion.
Student loan debt is the fastest growing form of debt in the US. It also makes up more than 11% of the total American debt being second only to mortgage debt.
Total student loan debt stands at $1.57 trillion with each person with an outstanding loan owing approximately $38,792.
Due to this 47% of borrowers delay buying a home and 40% put off retirement investment.
More than 80% of American adults have at least one credit card and 45% of those with credit cards don’t clear their balance each month. This means that over 55 million households will be paying credit card interest which is on average 17.13%.
The average credit card debt is $14,241 making the total across the country $787 billion.
Analysis of government data shows that 1 in 10 people in America owe money for medical or dental expenses. That’s around 23 million people.
Of them,11 million owe more than $2,000 and 3 million owe over $10,000. A survey showed that the collective medical debt was at $195 billion in 2019.
Home equity lines of credit or HELOC allows homeowners to borrow against the equity in their home. Currently there are more than 4.7 million HELOCs in the US.
The average amount of this type of debt is $73,685 with the highest percentage of borrowers being those over the age of 70.
Before taking out this kind of loan get some advice from financial comparison experts.
Which States Have The Most Debt?
Debt impacts Americans across the country, but some states have a greater debt load than others. Looking at the debt to income ratio gives a much better picture of how states are affected by debt.
Utah has one of the highest debt to income ratios in America. The total debt per capita is $71,900. In comparison, the average personal per capita income is $52,204.
This means that the debt to income ratio for Utah is 1.38. In essence, those in Utah have 38% more debt than their income can cover.
The state of Alaska has the same ratio of debt to income as Utah. Average per capita debt in Alaska is $63,920 while the income per person is on average $46,479.
Again this means that Alaskans have 38 percent more debt than their average income can pay for. For these two states the burden of debt is heavier than in other parts of the US.
New Jersey residents have an average income of approximately $46,338 per year. In comparison their average per capita debt is $62,350.
This leaves a ratio of 1.35 in relation to debt versus income. While not the highest in the country, having 35% more debt than their income covers means this is still a heavy debt burden.
The annual per capita income for Hawaii is around $58,655. Meantime the average loan amount per person is $77,410 making their debt to loan ratio 1.32.
This means that Hawaiians are trying to pay off loans that are more than 32% higher than the amount they are earning.
Halfway through the top ten list of states with the most debt is Massachusetts. Here we can see the ratio start to fall a little but not by a huge amount.
The average debt per capita in Massachusetts is $69,930. In contrast, the average annual income per capita is $54,211 making a debt to income ratio of 1.29.
Colorado has the same debt to income ratio as Massachusetts. However, in Colorado the average debt per person is higher at $82,100.
Held against the average income per capita for the state at $63,776 however the ratio is still 1.29. So, those living in Colorado have a burden of debt that is 29% higher than their income can cover.
In the top ten states with the most debt Arizona has the lowest at $60,090. While this may seem like a good thing unfortunately their income per capita is also one of the lowest in this table.
Average annual income per person in the state is just $47,235. This makes their debt to income ratio 1.27 or 27% more debt than income.
Nevada has slightly more debt per capita than Arizona at $61,150, but the average income per person is also higher at $50,305.
So, for those living in Nevada the debt burden is lighter at 1.22. This means the average debt is 22% more than income.
The average annual income per capita in Virginia is $59,187. However, the average debt per capita is $69,870 which means a ratio of 1.18.
While the burden of debt is lighter than in some other states it still means that those living in Virginia have 18% more debt than their income will cover.
The average income of Washington D.C. looks quite healthy at $86,567 per capita, but the average debt per capita here is $98,940. This gives a debt to income ratio of 1.14 or 14% more debt than income.
The majority of the average debt in Washington D.C. is taken up by mortgage debt at a whopping 76%.
If you are having trouble with debt and struggling to make payments for whatever reason it is important to ask for help as soon as possible. There are plenty of places you can go for advice.
Debt.com is one such company. They can connect you with top-rated companies who can put you on the right path to becoming debt free.
Debt By Age Group
Do you know which age group has the most debt? Find out if you’re in the most debt laden demographic.
Generation X are classified as those who are between the ages of 41-56 and this group has the highest amount of personal debt. On average those in this group owe $140,643 in outstanding debt.
Many of this generation are paying off their own debt which is on average around $45,000 while also trying to support their children at college.
The generation known as baby boomers are those who are between the ages of 58 and 76. This group has the second highest level of debt with an average of $97,290, the majority of which is mortgage debt.
They also have an average personal loan debt of $19,700 and average credit card debt of $6,043.
Millennials, the oldest of whom are now over 40 have an average debt of $87,448. Almost 45% of this debt is in the form of student loans. Millennials also have high mortgage debt.
This group is most likely to have young families, and so they have tighter financial constraints as they contend with debt and the cost of things like child care.
Generation Z are the youngest group who have an age range of between 18 and 23. Nevertheless they still have an average debt of $16,043 an eighth of which is credit card debit.
The average millennial credit card holder has a balance of $1,963 on which they will be paying interest of up to 25%.
If you want to increase your credit score then the best way to do this is with a credit builder account. This can be done through a credit union, bank or online provider.
Student Loan Debt By Ethnicity
With student loans being one of the majority contributors to personal debt it is worth looking at how this impacts different demographics.
Hispanic & Latino
One year after graduation 30% of Hispanic and Latino students owe between $25,000 and $40,000 in educational debt. 29% owe from $10,000 to $25,000.
This group is most likely to delay getting married and having children as a result of their student debt burden. For 35% of Hispanic and Latino students the monthly repayments are less than $100.
Black & African American
Black and African American students leave college owing more than $25,000 more than white college students. 29% of this group make payments of $350 or more and hold an average of $52,000 in student debt.
Half of Black students say that their net worth is less than the amount they owe in student loan debt.
White & Caucasian
Among white and Caucasian students 35% of them owe between $25,000 and $40,000 in student loans a year after graduation. 70% of this group have student loan debt.
Almost a quarter of white and Caucasian students pay in excess of $350 per month in student loan payments.
Asian students are the fastest to repay their student loans and are more likely to get a job that exceeds their student debt balance.
One year after graduation 30% of Asian students have student debt of less than $10,000. This group pays high and low-end rates in equal proportions.
American Indian & Alaska Native
23% of Alaska natives and American Indian students have student debt between $40,000 and $60,000 one year after graduation.
This group also receives the lowest average loan amount of $9,400 but owes the highest monthly payments.
Native Hawaiian & Pacific Islander
Native Hawaiians and Pacific Islanders are the most likely to have the lowest monthly student loan payments at less than $100. One year after graduation 33% will owe between $25,000 and $40,000.
However they are the least likely to receive non-federal loans.
Debt can become a spiral so if you think you are getting into financial trouble seek help sooner rather than later. This is rarely a problem that gets better on its own. Ask for help, it’s better than sinking deeper into debt.
Paul Martinez is the founder of BendingDestiny.com. He is an expert in the areas of finance, real estate, and eCommerce.
Join him on BendingDestiny.com to learn how to improve your financial life and excel in these areas. Before starting this blog, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.