Interesting Facts About Debt

Debt is the money owed by one party to another under the condition of paying it back within a specified period with interest.

From buying a home to running up a credit card bill during a shopping spree, debt is something we all deal with at some point in our lives. 

Though debt is a common subject, there are some hidden facts that people don’t know about debt.

In this article, we’ll be revealing some interesting facts about debt that you don’t but should know to manage more effectively.

Interesting Facts About Debt

Let’s dive right in!

1. People Often Overestimate the Amount they Owe 

Just like age or weight, a vast majority of lenders overestimate how much they owe?

In the Federal Reserve’s 2013 Survey of Consumer Finances, credit card companies and lenders reported about $683 billion in outstanding credit card debt, but the borrowers only reported around $268 billion, and this disparity is greater than any other type of debt.

2. Medical Debt is the Driver of Mental health Issues 

Medical Debt is the Driver of Mental health Issues

Medical debt is often referred to as the driver of health outcomes, and people having medical debt are more likely to experience poor mental health and shorter life expectancy.

The research on what type of debt affects life satisfaction the most shows that 64% of people with medical debt are the least satisfied with their lives than any other debt. 1

Read: Why Did My Credit Score Drop After Paying Off Debt?

3. Not All Debt is Bad

People think of debt as the worst thing that could ever happen to them. However, not all debt is bad debt.

Credit card debt allows people to pay student loans, pay the mortgage of their house, or build a good credit score without taking out a loan.

Even a bad credit score may get you an improved loan term and a lower interest rate in the future.

4. Gen X and Baby Boomers are Carrying the Most Debt

Gen X and Baby Boomers are Carrying the Most Debt

When it comes to debt, Gen Xers and baby owes the highest amount of debt compared to any generation.

As per the study conducted by Northwestern Mutual’s 2019 Planning & Progress Study, Gen Xers, the people between the ages of 39-54, and baby boomers (ages 55-73) owe $36,000 in personal debt, particularly because these generations were hit hard by the financial crises of 2008. 2

5. Millennials have the lowest Debt

Millennials are probably the only generation that has not reached its financially full plate state yet and enjoys the lowest debt on their credit cards than previous generations.

Only 56.7% of millennials have credit card debt, and this lower figure could be in part because they didn’t have enough time to rack time debt on their credit cards.

Read: What Is Debt Collection Agency 

Read: What Is Sleep Debt

6. People Who Got Credit Card Between 21-25 have the Most Credit Card Debt

People Who Got Credit Card Between 21-25 have the Most Credit Card Debt

The age when you get your first credit can have a significant influence on how much debt you will accumulate.

Consumers who got their first credit card between the ages of 21 to 24 carry the most credit card debt at $6,461, followed by the age group of 18 to 20 with an average debt of $6,050.

The people who got their credit cards at the age of 25 and older have much less debt with an average of $4,234. 3

7. 71% of People Hide their Debt from their Partner

Research shows that around 71% of the people who commit financial infidelity in serious relationships lie about having debt from their romantic partner because they are ashamed of it.

An average couple hides or doesn’t reveal their debt until 10 months into the relationship making it the fifth most common type of financial infidelity among both genders. 

8. You are not Responsible for Your Spouse’s Debt

You are not Responsible for Your Spouse’s Debt

There is no such law that makes one responsible for their spouse’s debt based on the marriage or live-in relationship unless you have signed to be responsible for your spouse or partner’s debt.

However, divorce or separation under specific circumstances may trigger some responsibilities for debt. 

9. Your Credit Score Will Recover from Bankruptcy 

One of the most interesting facts that people don’t know is that if they have never filed for bankruptcy before, their bankruptcy will be completely removed from their credit report after six years, and they can easily build a new credit within 2-3 years. 

10. Debt Settlement Can Improve Your Credit Score.

Debt Settlement Can Improve Your Credit Score

You may be surprised to know that debt settlement can actually help improve your credit score in the long run.

While it will initially go down when you enter into a settlement, if you make all of your payments on time and as agreed, your score will gradually improve.

This is because settling a debt shows that you are willing to work with your creditors to pay off what you owe and are not simply trying to avoid your obligations. 4

Read: What Is Debt Settlement?

11. Half of the people who are in debt are ashamed of it.

Even though being in debt is not that uncommon, many people are ashamed of it nonetheless.

According to a study, consumers from different categories of debt were asked if they were ashamed of it, and almost half of those people said yes.

Have a look the types of debt and the percentage of people who are ashamed of it:

  • Personal loans — 71%
  • Auto loans — 61%
  • Credit cards — 69%
  • Medical debt — 76%
  • Mortgages — 57%

12. People who get their first credit cards when they are 21-24 years of age face the most credit card debt

first credit cards

The age at which you get your first credit card matters a lot. People who get their first credit cards at the age of 21-24 have the highest debt at $6,461.

This is followed by people aged 18-20, who have average credit card debt of $6,050.

It is surprising that people who got their credit cards before they were 18 (using their parent’s account) had a much better average of $5,537.

And people who got their first credit cards after turning 25 showed the best average at $4,234.

13. 20% of people believe that those who do not have more than $5000 in debt are middle class.

Americans have different criteria for labeling a person middle class, such as the ability to pay bills on time, income, etc.

A surprising criterion that 20% of people believed was that those who have less than $5000 in debt are middle class. Another 7.5% felt not having any debt at all was middle class. 5

14. Less than half of Americans save $100+ each month.


Because of the high cost of living, rising prices, and high interest on debt, a lot of Americans struggle and live from paycheck to paycheck.

Only 44% of Americans save $100+ each month, and more than half of them are not able to do so.

Read Difference Between Debt Settlement And Debt Consolidation

Why Are Americans Drowning in Debt?

Wrapping Up

Consumer debt in the United States has been on the rise, and with each passing day, more and more people are finding themselves deeper in debt.

In this article on interesting facts about debt, we shared some shocking debt-related facts with you. We hope you found this useful.


What are the five main reasons of debt?

Low income, poor budgeting, divorce, dependency on credit cards, and student debt are the main five reasons of debt, among others.

Which state has the most debt?

California is the number one debt-holder state with an estimated debt of 519.54 billion U.S. dollars, followed by New York at 368.28 billion U.S. dollars and Texas at 324.21 billion U.S. dollars.

What is the biggest reason of debt in America?

The average American consumer debt balance is $96,371.

Mortgages, student loans, and home equity lines of credit are the biggest contributor of debt in the United States.

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The National Planning Cycles is committed to producing high-quality content that follows industry standards. We do this by using primary sources, such as white papers and government data alongside original reporting from reputable publishers that were appropriate for the accuracy of information while still being unbiased. We have an editorial policy that includes verifiable facts with due credit given where applicable.


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