US Debt Statistics

The consumer debt in the US has hit $13.67 trillion in the first quarter of 2019. It was a $120 billion increase from the previous quarter, which followed a trend of 22 consecutive quarterly increases. While consumer debt continues to rise, most analysts aren’t worried about it, since rising debt doesn’t necessarily have to be a bad thing. 

Types of Debt in the US

There has been an increase in four main areas of debt:

Home Debt (Mortgages)

The mortgage debt increased to $9.14 trillion, $397 billion more than in 2017. However, experts say that this is a good thing since it indicates a recovery of the housing market, after the economic crisis in 2008. 

Mortgage debt has been increasing since 2013, but at a slightly slower pace than the overall consumer debt.

Auto loan debt

Auto loan debt increased to $1.65 trillion, $52 billion more than in 2017. Federal Reserve lowered interest rates for auto loans in 2008 to fight the recession and give consumers an incentive to take car loans. 

That has started an increasing trend in the popularity of auto loans, which has maintained still. Experts suggest that this is a positive thing since auto loans have one of the lowest interest rates.

Student loan debt 

Student loan debt continues to rise after hitting a record $1.44 trillion in 2018, $64 billion more than in 2017. This increase has been characterized as extremely positive, as more and more people seek higher education, which is linked to a higher income in the future. 

Student loans are guaranteed to almost anyone, and low interest rates should encourage people to pursue higher education.

Credit card debt 

Credit card debt has reached $829 billion in 2018, which is a $45 billion increase from 2017. When the Bankruptcy Protection Act was passed in 2005, it made it harder for people to file for bankruptcy, which made them turn to credit cards in an attempt to pay for all the living costs. 

Almost two-thirds of all Americans use credit cards, an average user holds three cards, and carries $8,284 in credit card debt. 

Average Debt by Age in the US

The average debt and types of credit attributed to it vary among different age groups. Here is how they compare:

Average Debt of People under 35 

Those under 35 have an average debt of $67,400. Student loans make up the most significant portion of that, followed by credit cards. While experts classify student loans as “good debt” due to low interest rates and tax advantages, credit cards are a completely different story because of their high interest rates. 

When taking a student loan, experts advise thinking about your future profession and income. They suggest taking the maximum amount of what you can make in the first year after graduating.

Average Debt of People ages 36 to 44 

This group has an average debt of $133,100. This is a time when most people start families and move into their permanent homes, so it’s not surprising that mortgages take up the biggest portion of the owed amount. Credit cards and auto loans also take a significant part, while student debt is slightly lower.

Average Debt of People ages 45 to 54 

Ages 45-54 have an average debt of $134,600. Portions of this amount are divided like in the previous age group, where mortgages take up the biggest part, while there are even fewer student loans.

Average Debt of People ages 55 to 64 

This group has an average debt of $108,300. Most student loans are paid off, and people slowly start saving for retirement.

Average Debt of People ages 65 to 74 

Moving into the retirement age, this group owe $66,000 on average. Most loans are paid off, and when retirement arrives, people are usually spending and borrowing less. Mortgages, credit cards, and car loans still make up the biggest portion of the owed amount.

Average Debt of People over 75 

Last but not least, people over 75 owe the least, $34,500 on average. The majority of the group are enjoying retirement, and live on a fixed income. However, some are forced to work due to high medical costs and lack of savings.

Debt and Other Demographic Factors

Factors like geographical location, education, and income are all related to each other and are also linked to a person’s debt. 

People who live in states with higher living costs also have a higher median income and more overall debt. More income means they can repay any borrowed amount more quickly, and earning more is closely connected to spending more as well.

Higher education leads to higher income, which is essentially linked with more spending and debt. People with a bachelor degree hold an average $8,200 credit card debt, while that number is $4,600 for high school graduates and $3,800 for people with no high school diploma. 

Debt-to-income ratio shows that people who are in the lowest 20% on the income scale owe around 15% of their annual salary. For the top 20% of earners, that ratio is only 2.4%. That should highlight the importance of income, and its link with a higher amount owed, but also a greater ability to pay it back.

Research has shown that women carry more debt than men, which is also true for single people compared to married couples. When it comes to race, Caucasians owe the most, closely followed by Asians, while other ethnic groups are in less debt.

Consumer debt is good for economic growth, and when the economy grows, you can pay what you owe more quickly. Credit allows you to pay for your education, buy a car, and get a home without having to save for it. Better education leads to more skilled individuals and higher incomes, which additionally boosts the economy. 

Before taking out any type of loan, research your options carefully to ensure you are making the best decision for your financial health. At CreditNinja, we offer affordable, fully transparent and effortless personal loans that are tailored to your specific needs. To see how much you qualify to borrow, you can start an application today.