According to the Federal Reserve, the consumer debt in U.SA has hit its all-time high with $15.3 trillion in 2021, shared by 340 million people, and this is clear from the Consumer Debt Statistics In America.
The Great Recession that took place 15 years ago threw millions of people out of their jobs, and just when things started to look a little better, the COVID pandemic blew sand into the economy’s gear.
Due to the pandemic jolt, Americans’ motto to gain financial liberty has been changed into “give me debt!”.
Consumers with insufficient incomes to fulfill their financial obligations have ended 2021 with a record level of debt.
A huge chunk of consumer debt comes from mortgages, which make up 70% of the consumer debt followed by, auto loans, the second biggest component of consumer debt.
In this article, we’ll take a closer look at the key consumer debt statistics across the U.S, using data from Experian. Let’s dive right in and see the Consumer Debt Statistics In America.
Consumer Debt Key Statistics
- Total consumer debt increased 5.4% from 2020 to 2021.
- An average American owes $92,727 in consumer debt.
- Generation X carries the highest consumer debt totaling $140,643.
- The mortgage balance grew 7.6% to a total of $10.29 trillion in 2021.
- The auto loan and lease balances grew by $8.9% to $1.47 trillion.
- Credit card balances reach a record high with $52 billion in the last three months of 2021.
- People with higher education levels carry the highest consumer debt balance.
- Borrowers with doctoral degrees carry 97,916 in consumer debt, while college graduates carry $7,900 on average.
- The average debt balance increased by 3.9% to $96,3871 in 2021.
- Auto loans, student loans, and personal loans continue to rise in 2021.
- The District of Columbia has the highest consumer debt at $148,041.
- Average HELOC and credit card balances declined in 2021.
What is the Total Consumer Debt in 2021?
Almost every American has some kind of consumer debt, ranging from student and auto loans to mortgages and credit card debt.
According to a recent survey conducted by New York Federal Reserve figures, the last three months of 2021, have seen a record increase in the U.S household debt in 14 years.
In the fourth quarter of 2021, the total consumer debt increased up to $333 billion, which is 2.2% higher than the third quarter of 2021 and the biggest increase since 2007.
The total consumer debt now stands at $812 billion, higher than it was at the end of 2019.
Why Are Americans Drowning in Debt?
Average Consumer Debt by State
Almost all states of the United States have experienced a record increase in average consumer debt balances in 2021. However, a larger increase was seen by western with debt balances by more than 5%.
District of Columbia experienced the highest consumer debt at $148,041 while Delaware and Connecticut experienced the smallest increases in average debt, with a growth of more than 1%.
Here’s a total average consumer debt by state: Consumer Debt Statistics In America
|State||Average Consumer Debt|
|District of Columbia||159,957|
Read: Medical Debt Statistics
Average Consumer Debt by Debt Category
Mortgage and auto loans are the largest components of the consumer budget, and growing faster than any other debt category.
Although a mortgage is a personal investment, it is also seen as a type of loan and makes up 70% of consumer debt.
The total mortgage balance grew 7.6% to a total of $10.29 trillion in the first few months of 2021, while the total auto loan and lease balance grew by 8.9% to $14.7 trillion.
These increases occurred despite the housing and auto inventory shortages for much of the year, and consumers who found homes and autos had to purchase them with larger loans.
|Auto Loan and Lease||$19,703||$20,987||+6.5%|
|Total average balance||$92,727||$96,371||+3.9%|
Average Consumer Debt by Generation
At $140,643 on average, Generation X carries the most consumer debt than any other generation as mortgages and home equity lines of credit are the main parts of consumer debt.
However, in the last few years, there has been a noticeable increase in debt among the young age group.
Baby boomers had the highest debt in 2020, while Millennials experienced the biggest increment in mortgage and consumer debt in 2021:
|Generation Z (18-24)||$16,043||$20,803||+29.7%|
|Generation X (41-56)||$140, 643||$146,164||+3.9%|
|Baby boomers (57-75)||$97,290||$95,607||-1.7%|
|Silent generation (75+)||$41,281||$39,859||-3.4%|
Average Consumer Debt by Gender
Over the decades’ women have gained great economic, but most of them have more debt than men.
According to the crowdsourced data collected by PayScale, in 2021, women make about 82 cents for every dollar earned by men.
The standard salary for men is 18% higher than for women, which is an 8% improvement from 2015 and 1% from 2020.
There are many causes of the gender gap like discrimination and career choices, and maternity issues.
According to the survey conducted by the National Institute of retirement security in 2020, the standard amount of retirement income was $47,244.
So, women over the age of 65 and more also lag when it comes to saving and retirement.
Average Consumer Debt by FICO Score Range
In 2021, the average balances grew for consumers with good or better FICO Scores and declined for those who had fair or poor credit scores.
For higher scoring consumers, this increase in balance was a rebound from 2020, when balances of all consumers dipped.
According to Federal Reserve data, in 2021, retail expenditure rebounded, and consumers who were eligible for loans were able to make new purchases, which they put off in 2020.
The delinquency rates also remained relatively low, which shows that borrowers managed their monthly payments and mortgages well. Here is a quick look at average consumer debt by FICO Score Range:
|Very Good (740-799)||$99,471||$105,492||6.1%|
Consumer Debt and Student Loan
Consumers with student debt carry the highest debt in America. The total debt in March 2021 was around $1.7 trillion, which is more than double that of 2020.
A report published by the Brookings Institution showed that 6% of the consumers owed more than $100,000 in student debt, and 2% owed more than $200,000.
Student debt is typically amassed by consumers at a very young age and continues to negatively impact their finances for the rest of their working lives by preventing them from buying a house, getting married, or accumulating more wealth and increasing their debt.
According to the Department of Education, people between the ages of 18-29 accounted for 34% of the student debt, but the highest average belonged to 35-year-olds who took the loan, and their outstanding balance is $42,600.
Consumer Debt by Education Level
There’s a simple rule, the more educated you are, the higher your debt is.
By the year 2021, most Americans had a household with more than $58,000 in student loan debt and $30,000 in auto loans. younger generations may suffer from student loan debt, and this is a significant source of stress.
The highest debt ratio in the majors was computer engineering, physical engineering, chemical engineering, and computer sciences.
|Education Level||Average Consumer Debt|
|Bachelor’s degree debt||$28,950|
|Graduate School debt||$71,000|
|Law school debt||$145,500|
|MBA student debt||$66,300|
|Medical School debt||$1,45,500|
|Dental School debt||$292,169|
|Pharmacy school debt||$179,514|
|Nursing school debt||$23,711|
|Veterinary school debt||$183,302|
Consumer Debt and Minorities
Minorities earn less than white people, but it does not mean they get into more debt because they have less to spend and are less qualified for loans.
According to the Economic policy institute from 2000 to 2019, the standard household income of Blacks went from $45,442 to $46,073, For Asians, it jumped from $80,000 to $98,174, and for Hispanics, it increased from $47,841 to $56,113.
Minorities are affected differently by student loan debt. In 2021, blacks have an average of $52,000 in student loan debt.
The data collected from Educationdata.org said that 44% of black graduates have student loan debt and white people have 22% of school debt.
Credit Card Debt 2022
In the early months of Covid-19, Americans took out less credit card debt. However, in 2022, the balances started rising again. At the end of 2022, balances are up to $38 billion.
Today, approximately 191 million Americans own at least one credit card, and half of the U.S. population owns two credit cards at a minimum.
Let us have a look at the change in the credit card balance over the last five years:
|Year||Average credit card balance|
Medical Debt 2022
According to KFF, nine percent or one in ten owe medical debt. As of June 2021, the national medical debt was $88 billion.
Understanding and reducing medical debt becomes important because it influence the financial well-being of a family at different income levels. Let us have a look at the data:
|Income level||Percentage of financial well-being due to medical debt|
|$200,000 or more||22%|
|$150,000 to $199,999||16.1%|
|$100,000 to $149,999||15.6%|
|$75,000 to $99,999||20.1%|
|$50,000 to $74,999||20.4%|
|$35,000 to $49,999||27.4%|
|$15,000 to $34,999||49.2%|
|Less than $15,000||39.2%|
Family Type & Debt
Being married decreases the chances of a person being in debt.
According to the C+R Research report, for singles, the median income was $72,300. And the median income for households was $90,500 in 2020.
According to a study conducted by TD Ameritrade on 2000 people, it was found that 43% of married couples were financially secure in comparison with 29% of singles.
And if we talk about savings, then an average single person aged 35-45 had only $3,693 in savings. Whereas married couples had $10,399 in savings.
Impact of Pandemic on Consumer Debt
If you have less income source then it is very easy to surrender yourself to debt this lesson hit our homes in 2020.
The highest level of unemployment in 2020 broke the record since 1948 when it went from 3.5% in pre-COVID to the peak level of 14.8% in April 2020.
The highest growth over the decades is that the total Consumer debt grew by $800 billion, and that was an increase of 6% over 2019.
We hope you found this article on Consumer Debt Statistics In America useful.
How To Decrease Debt?
Ignoring debt balance is the worst thing that you can do. Not paying debt can lead to late fees, accrued interest, and damaged credit scores.
If you are struggling to pay back your debt, then here’s what you can do:
- Create a list of your debts: Create a list of all your debts, along with their interest rate, due dates, minimum monthly payments, etc.
- Go over your income & expenses: Now, create a list of your income along with your monthly expenses, such as groceries, tuition fees, subscription fees, bills, rent, etc.
- Adjust debt payments: After subtracting all your expenses, put in the money left toward your debt. Cut down on your expenses if you are not able to save enough.
- Prioritize paying debts: The more time you take to repay your debt, the more money you will have to cash out in the form of interest. So make sure you prioritize your debt and try to repay it as soon as possible.
It is 2023, and a majority of the American population is still trying to recover from the covid-19 pandemic. Inflation and increased interest rate are the main cause of slow progress.
However, the good thing is that the growth in debt percentage has slowed down, which shows that Americans are becoming careful with their spending.
Which type of consumer debt is the largest in the U.S.?
Home mortgage ($10.4 trillion) accounts for the largest consumer debt in the U.S., followed by student loans, which is approximately $1.59 trillion.
What is the percentage of Americans who are debt free?
Because of the high number of auto loans and mortgage loans, only less than 25% of Americans are debt free.
By how much has the consumer debt increased in the year 2022?
In the third quarter of the year 2022, the U.S. household debt increase by 2.2%, i.e., from $351 billion to $16.51 trillion.
Amit Gupta is the founder of National Planning Cycles, a company that helps startups, individuals, and small businesses with their financial planning. He has a vast amount of experience in the finance sector, having managed Google Play accounts for some of the world’s most successful unicorns. Amit is an expert in his field, and he uses his knowledge to help others achieve their individual goals.