SALT LAKE CITY — The amount Americans owe has never been higher. A new report from the Federal Reserve Bank of New York shows household debt has climbed to a record $17.7 trillion. Household debt includes mortgages, student loans, car payments and credit cards among other types of loans.
But the latest economic numbers are not all doom and gloom for America’s debt solution.
“This year we are starting off with a debt decrease,” said Christie Matherne, an editor with personal finance website, WalletHub.
Adjusted for inflation, Matherne says WalletHub has foundtotal household debt actually decreased by $135 billion. That’s a 6% drop compared to the same time last year.
“We’re not on a red a record debt payoff spree or anything,” Matherne said. “But we’re also not doing too bad paying down our debt either.”
Another gold nugget for economy wonks: WalletHub says the ratio between total household debt and assets continues to be at around 9.8%. Matherne says that’s a very healthy level.
“It’s really great news because like with everything costing so much right now, we could be in a lot worse shape than we are,” she explained.
Seeing a drop in debt in the first part of a year is not particularly rare with holiday spending behind us, but Matherne is optimistic the trend could have legs for the rest of this year.
“If your New Year’s resolution is to pay down your debt in a way that you haven’t before, please keep doing so,” she said. “It’s helping the economy. It’s helping you. It’s helping your monthly bottom line look a little better.”
Credit card debt is one place where we want to be careful. It went way down during the height of the pandemic. Just since the first half of 2022, it has climbed by over $210 billion.
FAQs
The average debt an American owes is $104,215 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans. Data from Experian breaks down the average debt a consumer holds based on type, age, credit score, and state.
What is the record household debt? ›
U.S. Household Debt Is at an All-Time High
The total household debt of $17.3 trillion entering 2024 is a new high for the U.S.
Is household debt increasing? ›
Average debt is up in nearly every category compared to 2020. This includes total household debt, credit card debt, mortgage debt, and auto loan debt. Total debt is up by over $2.5 trillion since 2020. The percentage of personal loans and auto loans in hardship are also above 2020 levels.
What is the average credit card debt in 2024? ›
Average American Credit Card Debt
The Federal Reserve study does not provide numbers for the average credit card balance per consumer. However, according to Transunion, this figure rose from $5,733 in the first quarter of 2023 to $6,218 in the first quarter of 2024.
What is the average credit score in the US? ›
Credit scores are three-digit numbers designed to represent the likelihood of paying your bills on time. Credit scores help lenders decide whether to grant you credit. The average credit score in the United States is 705, based on VantageScore® data from March 2024. It's a myth that you only have one credit score.
How much household debt is ok? ›
Each household should spend no more than 36% of their income on debt overall.
How much debt is too much for a family? ›
Debt-to-Income Ratio
It is expressed as a percentage. You should shoot for 35% or less (more on this shortly). Recurring monthly debt is bills you must pay every month, like mortgage or rent, car payment, credit cards, student loan and monthly debt bill.
How much house debt is too much? ›
Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment. The National Foundation for Credit Counseling recommends that the debt-to-income ratio of your mortgage payment be no more than 28%.
What is the leading cause of debt in the United States? ›
Top sources of personal debt
Credit cards continued to be the main source of debt for U.S. adults, accounting for more than double any other source cited by survey respondents. Personal education loans crept up to the third biggest source of debt, compared to fifth-place last year.
How many people have $50,000 in credit card debt? ›
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
What is a good credit score? ›
If your credit score is between 725 to 759 it's likely to be considered very good. A credit score of 760 and above is generally considered to be an excellent credit score. The credit score range is anywhere between 300 to 900. The higher your score, the better your credit rating.
How much credit card debt is the average American in? ›
What is the average credit card debt in the U.S.? Based on data from the Federal Reserve Bank of New York and the U.S. Census Bureau (based on 2022 and 2021 data respectively), it can be calculated that each American household carries an average of $7,951 in credit card debt in a year.
What percent of Americans are debt free? ›
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more.
How much debt does the average 30 year old have? ›
Average credit card debt by age and generation
| Generation | Ages | Credit Karma members' average credit card debt |
|---|
| Gen Z | Members 18–26 | $2,781 |
| Millennial | 27–42 | $5,898 |
| Gen X | 43–58 | $8,266 |
| Baby boomer | 59–77 | $7,464 |
Apr 29, 2024
Now that we've defined debt-to-income ratio, let's figure out what yours means. Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment.
