Consumer Debt Statistics

21.06.2021
Milena

The latest Federal Reserve consumer debt statistics show that Americans owe over $4 trillion in non-mortgage debts. Student loans, auto loans, payday loans, and credit card balances are among the factors that affect the total consumer debt.

Over the past decades, global individual debt has been reaching record-high levels on account of increased income coupled with higher living costs. The situation is especially grave in the United States with Americans owing more money than ever before.

So, let’s dive deeper into the personal debt crisis and learn more about the latest trends. We’ve also provided the answers to the most popular US personal debt FAQs.

Consumer Debt Statistics (Editor’s Choice)

  • The United States consumer debt is over $4 trillion.
  • Student debt contributes over $1.5 trillion to the total US consumer debt.
  • 69% of Americans believe debt is a necessity.
  • 53% of people in the US consider paying off personal debt a top priority.
  • 88.8% of couples with children are indebted.
  • The average American consumer debt is around $26,621.
  • Generation X carries the highest average personal debt of $32,878.

Current Consumer Debt Statistics

1. The total outstanding consumer debt in the US in Q1 2021 was over $4 trillion.

The latest Federal Reserve reports set the total American outstanding individual debt at $4.24 trillion. This figure is nearly $4 billion higher when compared to the amount in Q1 2020. These official stats show that outstanding consumer credit has been continually growing over the past few months. In Q4 2019, the total amount owed by American consumers was $4.19 trillion, as suggested by personal debt statistics. The last time the total outstanding United States consumer debt was under $4 trillion, was back in 2017, at $3.82 trillion.

(Federal Reserve)

Total US Consumer Debt Throughout the Years

2. Nonrevolving debt contributed nearly 77% of the total American outstanding individual debt.

A total of $3.21 trillion of the US consumer debt was nonrevolving debt in Q1 2021. This figure has increased by nearly 6% in the past 12 months. It’s interesting to note that 2018 was the last year when nonrevolving debt was under $3 trillion.

According to current consumer debt statistics, about $980 billion of the total consumer debt as of Q1 2021 is revolving. As the average credit card debt stats show, American’s credit balances have dropped in Q1 2021. The difference between the same period in 2020 was $97 billion.

(Federal Reserve)

Revolving vs Nonrevolving Share of Total Consumer Debt Throughout the Years

3. Almost 70% of Americans consider borrowing money a necessity.

Among the most interesting personal debt facts is how Americans perceive debt. Namely, 69% responded that borrowing money is a necessity, despite preferring not to carry debt. A similar share of the participants (68%) said that credit cards and loans expanded their opportunities in life.

Also, it’s amusing to note that younger generations are adverse towards debt, even though they carry it the most. People are also starting to separate good debt from bad debt, with a growing number of Americans realizing how some types of debt can help them build a good credit score, for example.

(Pew Research Center)

4. Student debt makes up for over $1.5 trillion of the US consumer debt.

Official student loan statistics in the US show that the total education debt in the country in 2017 was $1.4 trillion. The latest US consumer debt statistics reveal that the figure had surpassed $1.5 trillion in 2020, only to rise further in 2021. Another shocking fact is that this type of American consumer debt increases by $2,858 every second. So, college debt remains a serious issue stateside.

(Experian, Debt)

5. People with student debt carry higher debt and accumulate wealth more slowly than the rest.

Americans generate this type of consumer debt early in their lives. It then proceeds to impact them throughout their working lives by holding back their wealth accumulation and boosting their total individual debt. A PRC study in 2014 on debt statistics showed something curious. Namely, people without student debt had a seven times greater wealth than those with college loans.

On average, young and college-educated households without college debt have a median net worth of $64,700. The same families but with student debt had a much lower median net worth at $8,700. They, however, led the way in median total indebtedness of $137,010. Young American households without education debt had a much lower median total indebtedness of $73,250.

(Pew Research Center)

6. Student debtors are more likely to acquire other types of consumer debt.

Debt stats seem to show that one type of debt attracts the rest. Student debtors are especially affected as they are more likely to generate other types of debt. About 43% of households with college debt carried auto debt, too, compared to 27% of households without education debt.

The situation is even more drastic when comparing credit card balances. Around 60% of households with student loans carried such balances as opposed to only 39% of households without college debt.

(Pew Research Center)

7. In 2020, 67% of Americans with personal debt had a specific plan to pay it off.

The Planning & Progress American debt statistics indicate that two-thirds of debtors have a specific plan to deal with debt. However, the majority (27%) of those with debt spend up to 24% of their income towards paying it off. How much debtors fork off towards paying their debt has substantially changed after the COVID outbreak. In 2018, 20% of Americans were spending between 50% and 100% of their income on debt repayments.

(Northwestern Mutual)

Percentage of Income Spent to Pay Off Debt

8. On average, Americans owe approximately $26,621 in consumer expenses.

Northwestern Mutual discovered that the average personal debt had dropped from just over $38,000 in 2018 to $29,800 in 2019 to $26,621 in 2020. These consumer credit statistics show that the priority to pay off debt and their plan has worked out for US consumers. However, the percentage of people that carry no debt has slightly dropped to 26% from 27% in 2017. Meaning, even though US personal debt is dropping overall, slightly more Americans have it.

(Northwestern Mutual)

Consumer Balances Among US Debtors

9. Nearly half of Americans expect to be in debt for 1 to 5 more years.

More precisely, 47% of people in the US expect to pay off their debt in less than 5 years, as suggested by debt stats. Nearly a fifth of American debtors expect to be debt-free in 6-10 years, while 9% expect the same in 11-20 years. The same study by Northwestern Mutual established that 13% of Americans believe they will carry debt throughout their entire lives, while 11% don’t know when they could be free of debt.

(Northwestern Mutual)

How Long Do American Debtors Expect to Be in Debt

10. In 2020, credit card bills represented 22% of all US personal debt.

Over a fifth of the US consumer debt in 2020 came from credit card balances. This segment dropped since 2018 when it stood at 25%, reveal the consumer credit statistics. Education debt and car loans had respective contributions of 5% and 8%.

(Northwestern Mutual)

Main Sources of Consumer Debt in Recent Years

11. The ratio of debt payments to household income decreased between 2001 and 2016.

Statista’s figures reveal that the average American debt-to-income ratio peaked at 14.7% in 2010. In 2001, the ratio was lower at 12.7%. In both 2014 and 2017, this ratio was over the 14% threshold, i.e., 14.5% and 14.6%, respectively. The official consumer debt statistics show that it started decreasing from 2010 onwards; from 12.1% in 2013 to 10.8% in 2016, only to rise again to 11.8% in 2019.

(Statista)

12. Between 2015 and 2019, student loan debt one of the slowest-growing consumer debts.

Namely, this type of consumer debt increased at an average rate of just under 6% per year in this period. Between 2019 and 2020, however, student loan debt noted a 12% increase. A YoY increase of 6%, as per personal debt facts, place this type of debt second.

On the other hand, the segments that noted a decrease between 2019 and 2020 include retail credit card debt (11.2%), HELOC (10.9%), and credit card debt (8.8%).

(Experian)

YoY Change in Total Balances by Consumer Debt Type

13. HELOC was the highest average balance in 2020 among all types of consumer debt.

Even though the change in the average HELOC balance in the period between 2019-2020 was -10.9%, this sector represented the highest average balance. American consumers owed, on average, $41,954 on this type of debt.

Student loans contributed to the average amount owed with $38,792 and auto loans with $19,703. Their respective consumer debt by year change in average balance was 8.9% and 2.5% between 2019 and 2020, show the latest personal debt statistics. The average personal loan balance increased by 1.2% from $16,259 in 2009 to $16,458 in 2019.

(Experian)

YoY Change in Average Balances by Consumer Debt Type

14. 90.3% of couples with children carry some type of consumer debt.

Single parents with children are in a similar situation, with about 75.1% carrying debt. Families without children, on average, carry less debt due to the lack of extra child-related expenses. So, 77.5% of couples without children owe money. 71.2% of singles without children and younger than 55 are indebted, while the figure for those over 55 stands at 59.7%.

(Statista)

US Consumer Debt Statistics by Credit Score

15. People with poor credit generally have lower total consumer debt.

Experian established that in 2020 people with very poor credit (300-579) owe less money. Naturally, this makes sense since their spending power is lower. Americans from this group owe, on average, $58,633 for HELOC and $32,690 for student loans. Regarding credit card, auto, and personal loan balances, these are much lower at $3,446, $16,435, and $6,787.

(Experian)

16. Americans with good and exceptional credit scores owe the most.

Debt statistics nevertheless reveal that their debt structure is different compared to people with bad and poor credit. Student loans and HELOC play a significant role in the two groups. Those with very good credit (740—799) owed $37,851 for education and $49,026 for HELOC.

Americans with exceptional credit (800+) carried both lower average college debt ($32,308) and lower HELOC debt ($36,470). Both groups had a significant personal loan balance of $23,951 and $28,864. Finally, consumer debt statistics show that auto loans contributed towards their total average amount owed with $19,690 and $18,011, respectively.

(Experian)

17. Credit card debt is the highest among people with a good credit score.

While credit utilization is a major credit score factor, the credit score itself plays a role in banks establishing your credit limit. So, it makes sense that those with a high FICO score have higher spending limits and, therefore, carry higher credit card balance.

On average, the credit card debt of people with exceptional and very good scores was respective $3,616 and $6,051. American debt statistics show that those with a good score owed, on average, $9,712. Finally, Americans with fair and very poor FICO ratings owed $6,489 and $3,446, respectively, in average credit card balance.

(Experian)

18. HELOC makes for most of the total consumer debt of Americans, regardless of their credit score.

When it comes to HELOC debt as part of Americans’ total consumer debt, it seems that the credit score doesn’t matter much. Every group here has an average HELOC debt of over $35,000, consumer credit statistics reveal.

Still, as the FICO rating drops, the HELOC balances grow. The lowest average amount owed ($36,470) is carried by those with an exceptional credit score. The highest average HELOC debt ($58,633), in contrast, was noted among those with a very poor rating.

(Experian)

Personal Debt Statistics by Age and Generation

19. Generation X carries the highest average personal debt compared to Millennials and Baby Boomers.

In 2020, people from Generation X owed $32,878 on average. Millennials and Baby Boomers, in contrast, carried an average debt by age of $27,251 and $25,812, respectively, according to American debt statistics.

(CNBC)

20. Millennials owed the most in education loans, while credit card balances lead among Generation X and Baby Boomers.

The primary sources of debt vary depending on the generation. So, about 21% of personal indebtedness among Millennials was college debt. Credit card balances, car loans, and educational expenses for family members contributed 20%, 6%, and 7%, respectively. About 26% of Millennials owed nothing in 2018.

Generation X and Baby Boomers had drastically different sources of debt, as indicated by national consumer debt statistics. Credit card balances, car loans, and student loans were the top three debt contributors for Gen X with 29%, 7%, and 7%. Among Baby Boomers, most amounts owed were due to credit cards (25%), car loans (8%), and credit lines (5%). Only 13% of Generation X Americans claimed to carry no debt, while 28% of Baby Boomers were debt-free in 2018.

(Northwestern Mutual)

21. Gen X had the highest median credit card debt in 2014.

Generation X turned out to be the generation with the highest median credit card balance of $5,000. This was established in a 2014 research on personal debt statistics conducted by PRC. The Silent Generation, Baby Boomers, and Millennials carried a median credit card debt of $2,700, $4,000, and $2,500, respectively. The total median credit card balance was about $3,800 and much lower than the other types of consumer debt.

(Pew Research Center)

22. Baby Boomers and Generation X had the same median car debt of $14,000 in 2014.

Regarding car loans, Baby Boomer and Gen X were in the lead in 2014, per the PRC consumer debt statistics. Both generations owed a median amount of $14,000 on this type of consumer debt. Here, the Silent Generation and Millennials also owed the same median debt of $12,000. The total median car loan debt for all generations was at $13,000.

(Pew Research Center)

23. Generation X and Millennials owed the highest median amount of money on education loans.

Student loans, per the current consumer debt statistics, represent a considerable share of the total US personal debt. In 2014, Gen X and Millennials owed the most in this category. Namely, both generations carried a median college debt of $20,000.

Baby Boomers held the second spot with a median owed amount of $19,000. Finally, the Silent Generation owed only $10,000, which makes sense as they had the most time to pay their balances off. Still, the total median student loan debt in 2014 was hefty $20,000.

(Pew Research Center)

National Consumer Debt Statistics by Race

24. White American families owe more money but also have more wealth compared to African American and Hispanic households.

About 80% of all White American households and 78% of families with income less than $40,000 carried debt. The median total debt of these families was $41,500 and $8,660, respectively. The difference in median total assets was equally drastic at $275,000 and $54,250. The median total net worth of all White American families was $159,400, the latest US consumer debt statistics show. White American households with income under $40,000, in contrast, were worth about $22,200.

(Pew Research Center)

25. African American families have a much lower median total debt.

Turning to African American households, 82% of all and 78% of those making under $40,000 were indebted. Their median total debt was respective $18,950 and $7,120, highlighting a huge difference when compared to White American households.

Regarding median total assets, the situation is equally different, debt statistics reveal. All families had about $40,000 and families making under $40,000 had around $3,025 in assets. The median net worth of African American households is lower at $6,000 (all) and $0 (income less than $40,000).

(Pew Research Center)

26. In 2014, Hispanic households in the US noted the highest percentage of indebtedness.

Around 83% of all Hispanic households in America and 74% of families with an income of less than $40,000 carried debt. The total median amounts these Hispanic families owed in 2014, per the debt stats, were $19,875 and $3,332.

These figures corresponded with the median total assets and the median total net worth. Both aspects were higher than those of African American families and lower than those among White American households. Regarding total assets, the figures were $80,875 and $7,800. As for the total net worth, PRC discovered a median value of $16,300 and $2,110.

(Pew Research Center)

27. Over 50% of African Americans and Hispanics regret generating individual debt to pay for education.

PRC stated in their personal debt facts that respective 51% and 52% of African Americans and Hispanics regretted amassing college debt. They responded that, instead, they would find a different way to pay for their education rather than getting college loans.

Only 31% of White Americans shared this opinion. About 44% of White Americans responded that they would do everything the same when it comes to this type of consumer debt. Only 20% of African Americans and 24% of Hispanics had this positive outlook regarding student loans, consumer debt statistics show.

(Pew Research Center)

Frequently Asked Questions

What is consumer debt?

Consumer debt definition describes that as all personal debt generated for purchasing various goods or services. It is part of the total household debt, which also includes mortgages. Some common types of consumer debt are student loans, credit card debt, auto loans, and payday loans.

Consumer debt is categorized into revolving and nonrevolving. The first category includes balances that you pay off frequently, such as credit card payments. Nonrevolving debt, by contrast, is long-term and more significant, like education or car loans. National consumer debt statistics show that nonrevolving balances make the biggest share of personal debt.

It’s interesting to note that consumer debt doesn’t come near mortgage debt. The latter, in fact, contributes the most towards the average household debt in the US.

How is consumer debt different today than in the past?

Over the years, both the living costs and income drastically increased. Today, therefore, we notice record-high consumer debt levels in the United States and the rest of the world. Also, as people’s priorities and spending habits change, the type and size of the debt evolve as well.

With more and more Americans attending college, there’s a distinct jump in education debt. In the past few years, the use of credit cards has soared, increasing the revolving consumer debt by year too.

What type of consumer debt is the largest in the United States?

Student loans and credit card debt contribute equally to the total consumer debt of Americans. Each of these categories notes amounts owed of over $1.7 trillion. Auto loans come right up next with a total debt of over $1.3 trillion.

What is the number one reason why consumers default on their debts?

Excessive use of credit is established as the primary reason why people fail to cover their due payments on time. Sometimes, however, the reason can be an unexpected loss of income or cash emergencies. Still, spending more than one can afford remains the main culprit for defaulting on debt.

What is the average consumer debt?

The average personal debt was around $26,621 in 2020. This figure has been growing over the years, but dropped in 2020 along with credit card debt, while student loan debt hit record-highs. In 2019, the average consumer debt in the US was $29,800.

What percentage of the population is in debt?

About 80% of the population carries some kind of personal debt. Put differently, eight people out of 10 owe money for various reasons. Credit cards and education are the two most common types of consumer debt among Americans.

What percentage of America is debt-free?

Only two out of ten Americans carry no debt. Meaning, only 20% of the US population is debt-free, while the vast majority struggles with various debts. Stats show that people without indebtedness generate personal wealth faster and are better prepared for cash emergencies.

Final Thoughts

Americans recorded record-high consumer debt of $4.24 trillion in 2021. It seems that as the purchasing power and living costs are growing, people in the USA aren’t afraid to amass debt. From student loans to credit card balances, consumer debt statistics show that the amount Americans owe just keeps growing.

Still, owing money is a serious issue and limits people’s wealth-building potential. So, it’s essential to find a balance between your spending and earning to avoid drowning in debt. This way, you can focus on increasing your assets.

References: Federal Reserve, Experian, Debt, Pew Research Center, Northwestern Mutual, Northwestern Mutual, Northwestern Mutual, Statista, Experian, Statista, CNBC, Pew Research Center

Leave a Reply

Your email address will not be published. Required fields are marked *