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Key Figures Behind America’s Consumer Debt

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Americans are drowning in debt. Before the recession, we were merely treading water in dangerous seas. But once the economy turned ugly, jobs went away and nest eggs cracked, those with the most debt, sunk. Many people were forced into insolvency or foreclosure, unable to pay their obligations or provide for their families.

Although economists (mostly) believe the U.S. economy is in recovery, many Americans are still struggling to climb out of debt. Too many of us have grown weary of the fight.

It’s not that being in debt in America is a new idea — or even a bad one. Debt allows us to buy homes and cars, send our kids to college, and have things in the present that we can pay for in the future. Indeed, capitalism essentially was built on the extension of credit and the ensuing debt it creates.

There are a number of legal protections for paying back money owed to creditors and also protection from illicit debt-collection practices. There are a small number of federal regulations, and many states use them exclusively. Other states built in varying laws for their residents. Among them are California, Texas, Florida and New York. Among the laws are protections for credit-card holders.

Types of Debt in America

Consumer debt was approaching $14-trillion after the second quarter of 2019, according to the New York Federal Reserve. It was the 20th consecutive quarter for an increase.

The record $13.86-trillion of debt for Q2 was up $219 billion from the previous quarter and up $1.2-trillion over the previous record high of $12.68-trillion in the third quarter of 2008.

There has been consistent growth in four main areas of debt — home, auto, student loans and credit cards.

Home — Total mortgage debt rose to $9.4-trillion, an increase of $407-billion from the same juncture in 2017.

But the increase is a good thing overall. The rise of mortgage debt is an indication of recovery in the housing market. Household debt has been growing for five years, but mortgage balance growth has been on a slower incline since it stopped declining in 2013.

Auto — Total auto debt in Q2 of 2019 is 1.3-trllion, a jump of $59-billion from the same time in 2018.

When the Federal Reserve lowered interest rates in 2008 to fight the recession — giving consumers more incentive to pursue the typical three-to-five year loan for autos — it kick-started a trend that has held true today. Auto loans continue to increase because of low-interest rates.

Student Loans — They continue to escalate, growing to a record $1.48-trillion in Q2 of 2019, up $73-billion from the same juncture in 2018.

When the federal government assumed control of the student-loan program in 2010, replacing previous administrator Sallie Mae, costs were cut and the availability of education assistance was increased. The loans are guaranteed and it’s seemingly a win-win — lower interest rates to encourage higher education — although the rise of student-loan debt has been staggering.

Credit Cards — Credit-card loans crossed the $1 trillion mark, reaching $1.08-trillion in Q3 of 2019. Credit-card debt, considered revolving debt because it’s meant to be paid off each month, is only 26.2% of the total debt (after accounting for 38% of the total debt in 2008).

When the Bankruptcy Protection Act of 2005 was passed, making it more difficult for people to file for bankruptcy, there was a turn toward credit cards in a desperate attempt to pay bills. So credit-card debt soared, reaching its all-time peak of $1.028-trillion in July 2008 (an average of $8,640 per household). Most of that debt was due to unexpected medical bills.

Credit-card use took a hit during the recession, falling more than 10% in each of the first three months of 2009. Banks followed suit, cutting back on consumer lending when the Dodd-Frank Wall Street Reform Act increased regulations over credit cards. By April 2011, credit-card debt fell to $839.6-billion, a figure that has remained somewhat flat, although the average American household still owes $8,398.

Facts and Figures about American Debt

The modern-day credit card — which entered the scene in the late 1950s — has meant far greater buying power for U.S. consumers, but also financial disaster for many individuals and families.

Consider these statistics about personal debt in America :
  • More than 189 million Americans have credit cards.
  • The average credit card holder has at least four cards.
  • On average, each household with a credit card carries $8,398 in credit card debt.
  • Total U.S. consumer debt is at $13.86 trillion. That includes mortgages, auto loans, credit cards and student loans.

The first step to getting help with credit cards is learning about this type of debt. Your goal should be to pay off your credit card debt as soon as possible. Debt consolidation or debt settlement could help you achieve that goal of getting out of debt.


While Americans as a whole carry significant amounts of debt, each state has its own unique problems. The makeup of state-specific debt reflects not just the national economy but also factors like unemployment rates, the worth of homes and the cost of college.

Here’s a quick look at some of the states whose residents have the highest debt levels in the country:


The average Californian owes $334,925 in mortgage debt, surpassing every other state in the country (the national average is $192,749). And that figure is an increase of 2% from 2017.

California was deeply affected by the recession, which saw its unemployment rate hit 12%, while also pacing the nation in home foreclosures. Things have improved. California is close to the national average in credit-card debt at $5,000, although the figure is $7,000 in San Francisco.

The average Californian carries a $10,496 credit-card balance, which is the fourth-highest mark nationally. The average student-loan balance in California is $28,950, behind the national average of $37,173. That’s an interesting bright spot for a state that produces students who frequently get higher-paying jobs than other parts of the nation.

California residents have an average credit score of 661, which ranks in the upper-third nationally. That means Californians, generally, can borrow more money than the average person and have the ability to borrow that money at a more favorable rate.


Florida probably had the most catastrophic effect from the housing-market crash in 2007. The state’s homes lost half their market values and improvement was slow in coming.

But it looks like Florida has turned a corner.

The average Floridian owes mortgage debt of $183,016, an increase of 2.48% from 2016. More significantly, though, about 13.1% of Florida home mortgages are “underwater’’ (meaning the debt is higher than the home is actually worth) to rank ninth nationally. That’s marked improvement from a 2015 study, which listed 30% of Florida mortgages as underwater (and the figure was 44% in mid-2012).

Florida has an average credit-card debt of $8,444, which ranks 12th-highest nationally.


Massachusetts has the nation’s fifth-largest average mortgage debt at $252,624, a figure that has doubled in the last decade ($126,332 in 2007). That statistic might seem alarming, but the state has a median household income of $77,385 (which is $17,049 higher than the median U.S. household) and an average credit score of 699 (fifth-highest nationally).

Still, Massachusetts had a higher than average rate of foreclosure filings in 2017, according to a report from ATTOM Data, a property database. Foreclosure filings in Massachusetts represented 0.54% of the state’s total housing units. Nationally, foreclosure filings fell 27% compared to 2016, reaching the lowest level since 2005.


The unemployment rate — long a nightmare from Michigan residents — has transformed into a positive. From a high of 13.7% in 2009, the figure dipped to 3.9% in 2017, the lowest marker in nearly two decades.

Michigan had the nation’s 11th-highest bankruptcy rate, but its average credit score has improved to 677, two points ahead of the national average. Another positive: The state’s average credit-card debt is $6,082, the third-lowest nationally.

New Jersey

New Jersey, long known for its high cost of living, has the nation’s fourth-highest average mortgage debt at $247,868. The state also has the nation’s sixth-highest average credit-card debt at $9,454.

The state’s average credit score is solid at 686. New Jersey also has some of the best and most comprehensive consumer protection laws in the country, regulating nearly every type of transaction.

New York

New York ranks 13th nationally in student-loan debt at $28,650 (Connecticut leads at $38,500), but 60% of 2017 graduates owed money on student loans. That doesn’t help New Yorkers manage their mortgage debt ($243,244, ninth nationally) or credit-card debt ($8,764, eighth).

The state benefits from legislation, including state laws that prevent debt collectors from targeting various types of income such as veterans benefits and child support. Laws also help protect against unfair and misleading tactics in certain home sales.


Ohio residents continue to struggle with student-loan debt. The state has an average debt of $30,000 and two-thirds of all students have student-loan debt. Meanwhile, 8% of Ohio residents age 50 and older still have student loans and there’s an overall 12.95% student-loan default rate in the 25-to-34 age group.

Meanwhile, Ohioans are managing money very well in other areas. The state is the nation’s best in average credit-card debt ($5,446) and fifth-best nationally in average mortgage debt ($129,106).


The state continues to have formidable student-loan debt ($36,193, twice as much as Utah, the lowest-ranking state) and 67% of the state’s college graduates in 2017 left with some sort of debt. The state’s average mortgage debt is more moderate ($161,013), although it increased by 9% in one year, and its credit-card debt ($6,065) is among the nation’s lowest figure.

Pennsylvania laws are weak when it comes to consumer rights and protections, leading to problems such as high rates of identity theft.


In the state where everything supposedly is much bigger, Texas found itself with a whopper of a statistic when it came to average mortgage debt in 2017. The overall figure ($166,762) didn’t make the nation’s top 10, but it was an increase of 28.5% from a year earlier. The state is very respectable in credit-card debt $7,692 (21st).

The average credit score (656) lags behind the national average of 695. It’s possibly a reflection of Texas residents struggling to make on-time payments, which punctures the credit history more than any other factor.


The state has shown much improvement over the past decade, going from top-six rankings across the board to middling showings in credit-card debt ($7,867, 20th) and student-loan debt ($29,000, 22nd), while still ranking high in mortgage debt ($249,379, ninth).

Virginia continues to have one of the nation’s top median household incomes ($71,535), more than $11,000 higher than the U.S. median. It also has a history of responsible payment patters, reflective of its high average credit score (680).

The state continues to suffer from high levels of consumer fraud and identity theft. There are exceptionally few consumer protection laws.

Debt Can Lead to Foreclosure

While the statisticians can supply us with a plethora of facts and on how much debt Americans are in, the human costs of America’s debt problem — though real and serious — are harder to calculate. They reside in the millions of personal stories and countless legal forms and financial files all across the country, and they will be subject to review by the social scientists and economic essayists of the future.

These statistics also shed light on the human cost of debt:
  • Total bankruptcy filings in 2011 — 1.4 million.
  • Number of homes that went into foreclosure from 2009 through 2011 — 7.6 million.
  • Mortgage delinquency rate in July 2012 — 7.58 percent.
  • Homes foreclosed upon in 2011 — 1 in 69.

As Americans continue to make slow headway against the financial doldrums that have kept our country in a prolonged recovery, debt repayment will be an important part of rebuilding our lives.

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