Average American Debt

First Republic Bank
September 13, 2022

  • The average American debt level has been rising for years.
  • Fewer than one quarter of American households live debt-free.
  • Learning ways to tackle debt can help you get a handle on your finances.

In 2021, Experian conducted a review of consumer debt and discovered the average American credit card balance was $5,221, car loans amounts were nearly $21,000 and personal loans owed amounted to slightly over $17,000. Meanwhile, the average American savings account had a balance of $4,500. The average debt of Americans is growing, diminishing net worth and financial security in the process.

Average debt in America

The Federal Reserve Bank of New York reported an increase in the total amount of debt in the American household, rising by $27 billion to $15.85 trillion, in the first quarter of 2022. Mortgage debt rose by $250 billion during this period, and car loan debt increased $11 billion. Put simply, the issue of debt in the typical American household is growing tremendously.

How much debt does the average American have?

The same 2021 study from Experian shows that the average American has a consumer debt balance of $96,371, up 3.9% from 2020. Mortgages, home equity lines of credit and student loan balances are the biggest contributors to American debt today.

How many Americans are in debt?

The percentage of Americans in debt depends on what type of debt is being reported. According to the Urban Institute, more than 64 million Americans carry credit card debt. The Experian study also found that 340 million Americans are currently carrying some form of debt.

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.

Average household debt by debt type

The average debt per American depends on a few factors, chiefly the type of debt in question. The 2021 Experian study details what kind of household debt Americans carry, gathered through calculating the average mortgage balance, average credit card balance, other loan balances and the use of consumer credit card accounts, among other factors.

Debt Type 2021 Average Consumer Debt Balance
Mortgage debt $220,380
Home equity line of credit (HELOC) $39,556
Student loan debt $39,487
Auto loan debt and lease $20,987
Average credit card debt $5,221
Personal loans $17,064
Total average balance $96,371

Average debt by age

In the 2021 study Experian reviewed the relationship each generation has with debt. For example, millennials tend to carry less personal loan debt than Baby Boomers or Gen Xers.

Age Group 2021 Total Average Debt
Generation Z $6,658
Millennials $13,418
Generation X $18,922
Baby Boomers $20,370
Silent Generation $17,334

Average debt by percentile of income

The Survey of Consumer Finances indicates that the amount of debt by net worth percentile grows as household income increases.

Percentile of Net Worth 2019 Average Debt (Thousands)
Less than 25% $66.94
25% – 49.9% $89.07
50% – 74.9% $132.52
75% – 89.9% $186.02
90% – 100% $412.65

Average debt-to-income ratio in America

According to the Federal Reserve Bank of New York, the total amount of household debt in the United States reached a record-high $15.85 trillion by the spring of 2021. Some of this increase was spurred on by a loose job market in 2020, when unemployment hit 14.8% in April 2020. The less income you bring in, the more likely you are to rely on credit, go into debt or have trouble paying off debts you may already have.

The debt-to-income ratio calculates how much debt a person has relative to their income. Expressed as a percentage, the average American debt-to-income ratio for 2021— comparing overall debt to annual income — was 145%, based on quarterly state-level data. The higher this ratio, the more debt a household has versus income. 

Average debt by state

The average American family debt varies significantly by state. 

States 2021 Total Average Consumer Debt
Top 10  
District of Columbia $159,957
Colorado $140,327
Hawaii $138,274
California $137,301
Washington $136,170
Maryland $126,687
Utah $122,474
Virginia $122,273
Massachusetts $120,370
Oregon $112,974
Bottom 10  
Mississippi $60,615
West Virginia $60,907
Kentucky $68,685
Arkansas $69,010
Ohio $70,747
Alabama $72,138
Michigan $72,735
Indiana $73,995
Louisiana $75,373
Kansas $76,090

How much debt is normal?

There’s no general figure for how much debt is normal — your personal finance situation is unique and should be viewed as such when looking at your current debt levels. There’s also good debt versus bad debt: mortgages on a primary residence are often considered “good debt” since they’re repaid steadily over a period of time while you accumulate equity in your home. Bad debt, for example, can take the form of an unpaid credit card balances. 

A few benchmarks can help you determine a normal amount of debt, however. You can gauge whether your debt is in line with what lenders want to see in an ideal candidate.

The Federal Housing Association (FHA) guidelines permit a total mortgage payment and any recurring monthly obligations ratio as high as 43% for borrowers. Your credit score provides an at-a-glance look at how debt affects your finances, and your credit report can help you determine whether your credit utilization is too high relative to income.

How to pay off your debt

Debt repayment can be approached several ways. Strategies typically include monthly payments and may employ debt consolidation or a loan refinance option (when feasible). Some may even include forbearance in lieu of delinquency, meaning a creditor may suspend repayment for a time to help you re-organize your finances. 

Whether you consider the debt snowball or debt avalanche method to pay off debt, you’re taking action on the money you owe. Doing so can help you prepare for the next chapter in your life or an unforeseen emergency, all while doing what you can to meet or exceed the average American savings account total.

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