Living without debt has become increasingly difficult and sometimes overwhelming for American consumers. Total household debt rose to an average of $17.06 trillion in the second quarter of 2023, with credit card balances alone reaching a high of $1.03 trillion, according to the Federal Reserve Bank of New York.
Here’s a look at the average consumer debt held by Americans in 2023, broken down by age and gender as well as by type of debt.
American consumer debt in 2023
There are several types of consumer debt that contribute to the total debt that the average American carries. The term “consumer debt” generally refers to debt used to purchase goods and services for individual or household consumption, such as:
- Credit card debt.
- Mortgages.
- Home equity lines of credit (HELOCs).
- Auto loans.
- Student loans.
- Medical debt.
- Personal loans.
Total consumer debt balances increased to $16.38 trillion in 2022, according to Experian. This rose again to $17.06 trillion in 2023, per the Federal Reserve Bank of New York. This means that consumer debt balances increased by 4.15% over the past year.
Out of the various kinds of consumer debt, credit cards in particular seem to be the largest driver of this increase. The average credit card debt increased by 13.2% from 2021 to 2022, according to Experian — a reflection of inflation increasing the cost of goods.
Credit card debt is also often the most expensive type of consumer debt to carry, which means indebted Americans are likely paying high interest rates on their balances.
How much debt does the average American have?
Americans owe an average of $17.06 trillion in consumer debt — this is a massive number that can be tough to wrap your head around. That’s why it’s helpful to look at the American consumer debt landscape in terms of averages.
Here’s how $17.06 trillion in total consumer debt breaks down for the average American:
Average household debt in 2023
As of the third quarter of 2022, the average American held $101,915 in debt, according to Experian. Keep in mind that while this number might seem staggering, it’s an average — some consumers carry more or less than this amount of debt.
Average American debt by age in 2023
How much debt the average American owes tends to vary by age. As of the third quarter of 2022, Generation X and millennials carried the most debt in America, according to Experian. Here’s the total amount of debt held by each of the generations on average:
Average American debt by gender in 2023
The amount owed by the average American also differs between men and women. Note that the most current statistics don’t include average debts owed by non-binary Americans.
In general, American women hold less debt than their male counterparts. As of the second quarter of 2019, women carried an average total of $85,169 while men carried an average total of $103,702, according to the latest data from Experian.
In fact, women owed less than men in every category of consumer debt except for student loans. Here’s how the average balances broke down:
Breakdown of the average debt in America
Here’s how the total debt owed by Americans breaks down by common consumer debt categories, according to data from the Federal Reserve Bank of New York and the Federal Reserve Board:
Average credit card debt
As of the third quarter of 2022, the average American adult held $5,910 in credit card debt, according to Experian.
“Credit card debt is typically unsecured (doesn’t require collateral) and comes with high interest rates, often exceeding 20% APR,” says Walter Russell, CEO of financial advising firm Russell and Company.
So while the average balance might not seem terribly high, credit card debts can quickly grow with added interest charges if you don’t pay off your card each month or are only making the minimum monthly payments.
Additionally, credit cards tend to have higher rates compared to other types of debt, and these rates are typically variable — meaning they can fluctuate over time according to market conditions. Ultimately, this can lead to a cycle of credit card debt that’s hard to escape.
Average student loan debt
The average student loan debt for borrowers in 2023 is $37,338 in federal student loans and $54,921 in private student loans.
Federal student loans come with a variety of borrower protections, such as access to federal deferment and forbearance options, income-driven repayment plans and student loan forgiveness programs.
Private student loans, on the other hand, don’t offer these protections and generally have more inflexible repayment options. However, borrowers with excellent credit might qualify for lower rates on private loans compared to the standardized rates on federal loans.
Average personal loan debt
As of the third quarter of 2022, the average personal loan debt per consumer was $18,255, according to Experian. This marks a 7% increase in this type of debt from 2021 to 2022.
Because inflation raised the cost of living during this time, more Americans were turning to credit cards and other debt — including personal loans — to make ends meet, which likely contributed to this increase.
Average mortgage debt
As of the third quarter of 2022, the average mortgage debt balance was $236,443, according to Experian. For HELOCs — a type of second mortgage that allows you to access your home’s equity — the average balance was $41,045.
While mortgage debt makes up the vast majority of American consumer debt, it’s generally considered to be “good debt” by creditors, especially when compared to unsecured debt like credit cards and personal loans. This is partially because paying down your mortgage builds equity in your home, which in turn increases your net worth. Homeownership is also seen by creditors as a sign of financial stability.
Keep in mind: A mortgage is secured by your home, which means you risk losing your house if you fail to make your payments. So while mortgage debt is generally considered “good,” it’s critical to make sure that your payments will comfortably fit in your budget.
Average auto loan debt
As of the third quarter of 2022, the average auto loan debt per consumer was $22,612, according to Experian. This was a 7.7% increase from 2021 — likely caused by the increase in car prices due to ongoing inventory shortages as well as rising interest rates.
Note that while auto loans are also a type of secured debt, they don’t offer the same kind of financial benefit as a mortgage. This is mainly because most cars continuously depreciate (lose value) while real estate depreciation can be avoided by maintaining or improving the property. In fact, real estate can grow in value (or appreciate) over time, depending on mortgage rates, the housing market, location and home improvements.
Other types of debt
There are also other kinds of debt that many American adults carry. For example, a 2022 KFF report found that nearly 9% of U.S. adults (about 23 million people) owed medical debt. Out of these, 11 million had balances greater than $2,000, and 3 million owed more than $10,000.
What to do if you’re in debt
There are several strategies that can help you take control of overwhelming debt. Here are some options to consider:
Talk to your creditors
If you’re struggling with debts, it’s a good idea to reach out to your creditors to see what options are available to you.
“Contact your creditors to discuss your situation and see if they are willing to offer lower interest rates, extended payment terms or settlement offers,” Russell says.
Tip: It’s especially important to talk to your creditors if you’re struggling to make your payments. Letting them know about the situation and seeing what assistance is available can help you avoid the fees and credit score damage that can come from missed payments or defaulting on a loan.
Increase your income
Increasing your income — such as by getting a raise or starting a side hustle — can provide more wiggle room in your budget and help make debt payments more affordable.
“Taking on a part-time job, freelancing or selling unused items can generate additional income,” Russell says. “That extra income should be applied toward your debt.”
Consolidate your high-interest debt
If you’re carrying debts with high interest rates, consolidating them with a personal loan could be a good option. If you have good credit, you might qualify for a lower interest rate on a personal loan compared to what you’re currently paying. This could reduce your overall costs and help you pay off your debt faster.
You could also opt to extend your repayment term to reduce your monthly payments — though this means you could end up paying more in interest over time.
Tip: Personal loans tend to have lower interest rates than credit cards. However, while a credit card consolidation loan could help you save money on interest, you’ll typically need good to excellent credit to qualify for the best personal loan rates.
Use the debt snowball method
If you want to simply focus on paying off your debts as quickly as possible, the debt snowball method might be a good option. This is a repayment method that focuses on repaying your smallest debts first. Here’s how it works:
- List all of your debts in order of lowest to highest balance.
- Determine how much extra you can afford to pay toward your debts each month.
- Put that extra amount toward the debt with the smallest balance while continuing to make the minimum payments on your other debts.
- Continue until the smallest debt is paid off, then move on to the next smallest balance — and so on until all of your debts are repaid.
Tip: The debt snowball method can be a good option if you’re motivated by small wins. However, if you would prefer to save money on interest and don’t mind slower progress, the debt avalanche might be a better fit.
Use the debt avalanche method
You could also consider the debt avalanche method, which focuses on paying off your debt with the highest interest rate first. Here are the steps:
- List all of your debts in order from highest to lowest interest rate.
- Determine how much extra you can pay each month.
- Apply those extra funds toward the debt with the highest interest rate while continuing to make the minimum payments on your other debts.
- Continue until you’ve paid off the debt with the highest interest rate, then move on to the debt with the next highest rate — and so on until all of your debts are repaid.
Tip: The debt avalanche method can help you save money on interest — but it can also take longer to see any progress. If you’re more motivated by small wins, you might consider the debt snowball method instead.
Sign up for a debt management plan
With this option, you’ll work with a credit counseling agency that will review your financial situation and help you develop a personalized budget. This process will include consolidating your debts under a single repayment plan with one manageable payment.
The counselor will then work to get your creditors on board with the plan. In some cases, creditors might be willing to reduce or waive fees, lower interest rates or provide other benefits. Afterward, you’ll make fixed, monthly payments to the agency, which will disburse funds to your creditors. It will typically take three to five years to successfully complete a debt management plan.
Note that credit counseling agencies usually charge fees for debt management plans. These usually involve an initial set-up fee as well as monthly fees, though some companies charge success-based fees that are only assessed if you receive a solution to your debt. Additionally, only unsecured debt is eligible for this type of repayment plan.
Pursue debt settlement
In some cases, you might be able to negotiate with your creditors to accept a reduced payoff amount rather than the full amount you owe in return for forgiving (or “settling”) the remaining balance. This can be done on your own, or you can work with a debt settlement company to negotiate on your behalf.
If you are struggling to make your payments, prefer a fast solution and want to avoid filing for bankruptcy, debt settlement can be a helpful option. However, it also comes with potential consequences — for example:
- Debt settlement companies will generally ask you to stop making payments to your creditors while they try to negotiate, which can severely damage your credit and lead to additional fees.
- Companies usually charge fees for their services — often 15% to 25% of the enrolled debt amount.
- Your creditors might not accept a settlement offer — and they might even file lawsuits against you to try to recoup their losses.
Tip: If you have good credit and want to simplify your repayment, debt consolidation might be a better option than settlement — but it’s important to compare the pros and cons of both approaches to see which is more ideal for your situation.
