Americans are in deeper debt than ever before, and it’s only getting worse. From student loans to mortgages, credit card balances to medical bills, the average American is drowning in debt — and it’s starting to show.
As of 2024, the average U.S. household is carrying $105,056 in debt, with $18 trillion in total debt across the country. This staggering amount doesn’t just reflect the growing cost of living; it signals a larger crisis that’s slowly tightening its grip on millions of families.
Here’s a breakdown of the average American’s debt, and why it’s time to start paying attention.
1. Mortgages: The Biggest Burden
When it comes to debt, mortgages are by far the biggest offender. $12.605 trillion of the total U.S. household debt comes from mortgages — that’s around 70% of the entire debt load. The average homeowner now owes about $263,180 on their mortgage. For many families, the mortgage is their largest monthly payment, with an average payment of $2,127.
The problem? Rising mortgage rates. With the 30-year fixed-rate mortgage hovering around 6.3%, many new homeowners are feeling the squeeze. And with home prices continuing to climb, it’s harder than ever for young people to afford their first home. The average home in the U.S. now costs nearly $400,000, a price tag that puts the dream of homeownership further out of reach for many.
Even though some people are opting for adjustable-rate mortgages to lower initial payments, this strategy could backfire if interest rates continue to rise. As people stretch their finances to buy homes, the risk of foreclosure looms larger than ever.
2. Credit Cards: A Dangerous Cycle
Americans also owe $1.211 trillion in credit card debt — the average person carrying a balance of about $6,380. And with credit card interest rates averaging 19%, it’s no wonder that the debt cycle seems impossible to escape.
Credit card debt has a tendency to snowball. As balances grow, the monthly interest charges pile up, leaving borrowers with larger and larger bills. While some people use credit cards to pay for everyday expenses, others are using them as a lifeline to survive in an economy where inflation is pushing prices higher every day.
According to recent reports, 8.96% of credit card balances are 30 days or more overdue, signaling that many Americans are struggling to stay afloat. Millennial and Gen Z consumers are carrying the heaviest burdens, and Gen X has the highest average credit card debt at $8,870.
3. Car Loans: The Rising Cost of Transportation
Along with mortgages and credit card debt, many Americans are also bogged down by auto loans. The average car loan balance has climbed to $24,326, contributing to the $1.655 trillion in auto loan debt. Monthly car payments are averaging $737 for new vehicles, and $520 for used cars.
As car prices continue to rise due to inflation, many consumers are forced to take out larger loans to buy the vehicles they need. This trend is especially concerning because 1.6% of auto loans are seriously delinquent, signaling that many borrowers are having trouble keeping up with payments.
The situation is compounded by supply chain issues and the ongoing shortage of new vehicles, which have sent prices skyrocketing. The question is: Can Americans continue to afford these high car payments, especially with interest ratesclimbing?
4. Student Loans: A Heavy Load for Young Americans
Student loans have long been a source of debt for millions of young Americans, and the burden continues to grow. The total U.S. student loan debt stands at $1.615 trillion, and the average borrower owes $39,000. While federal student loan payments were paused during the COVID-19 pandemic, those payments are now set to resume, hitting millions of borrowers who have been living without the pressure of monthly student loan bills.
Many graduates are finding it difficult to pay off their loans while also managing the rising costs of living. The combination of student debt and high rent or mortgage payments is preventing many young adults from saving for the future, buying homes, or starting families.
5. Medical Debt: The Silent Crisis
Medical debt is a growing, silent crisis in the U.S. 43 million Americans are dealing with medical debt, many of whom face bills that can’t be paid because of high-deductible health plans and out-of-pocket costs. This kind of debt is especially damaging because it’s often unexpected — the result of emergency room visits, surgeries, or treatment for chronic conditions.
The burden of medical debt disproportionately affects lower-income households, and it’s a leading cause of bankruptcy. As health insurance premiums rise and coverage becomes less comprehensive, Americans are increasingly turning to medical credit cards and personal loans to cover their bills, plunging them further into debt.
6. Personal Loans: The Growing Trend
Personal loans have become a go-to solution for many Americans who are struggling with debt, but they come with their own risks. The average personal loan balance is about $11,652, and while these loans typically offer lower interest rates than credit cards, they still carry significant risk.
Personal loans are commonly used for things like home repairs, vacations, or consolidating other debt, but they’re also used by some people to cover everyday expenses when things get tight. With interest rates averaging 12.32%, the debt load can quickly become unmanageable, especially if borrowers take out multiple personal loans over time.
The Debt Delinquency Problem
Delinquency is a growing concern across all types of consumer debt. The total delinquency rate for credit cards, auto loans, and personal loans has been steadily climbing, reaching levels not seen since the 2008 financial crisis. More Americans are falling behind on their debt payments, and the fallout from missed payments is contributing to the growing debt crisis.
8.5% of credit card balances are currently in delinquency, while 6.5% of auto loans and 5% of personal loans are seriously overdue. These numbers are a red flag, signaling that more and more Americans are struggling to keep up with their obligations.
How Did We Get Here?
So how did the average American end up carrying so much debt? There are several factors at play:
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Wages have not kept up with inflation: While the cost of living continues to climb, many Americans are still earning the same wages they did years ago. This gap has forced many to turn to credit cards, loans, and other forms of borrowing to make ends meet.
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Housing costs are soaring: With home prices rising at a rapid pace, many families have been forced to take on larger mortgages to afford a place to live. The dream of homeownership is becoming increasingly out of reach for younger generations.
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Student loan debt is crippling: The rising cost of education has left many students burdened with debt for years after graduation, hindering their ability to save or invest in their futures.
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Healthcare costs are rising: With health insurance premiums increasing and out-of-pocket costs soaring, many Americans are left with crushing medical bills that they can’t afford.
What Can Be Done?
The solution to this mounting debt crisis isn’t simple, but there are steps individuals can take to reduce their financial burden. Financial experts recommend debt consolidation or seeking lower-interest loans, creating a strict budget, and cutting back on non-essential spending.
For the nation as a whole, experts say that stronger regulations on credit card companies, mortgage lenders, and student loan servicers could help prevent the worst effects of debt. Additionally, efforts to control the rising cost of healthcare and education would go a long way in alleviating the financial strain on American families.
The Bottom Line
The average American’s debt is out of control, and it’s clear that the nation is facing a financial crisis. With over $18 trillion in total household debt, the time for action is now. Whether it’s tightening up personal finances, addressing systemic issues like housing and healthcare costs, or rethinking how debt is managed, something has to change before the debt bubble bursts.
The clock is ticking.