Being in debt carries a stigma, and many people avoid talking or even thinking about it. However, struggling to keep up with monthly payments is far more common than you might think. If you’ve ever wondered what percentage of Americans are in debt, the answer might surprise you.
So how many people in America are in debt? Here’s a closer look.
What Percentage of Americans Are in Debt? How Many Americans Are 100% Debt-Free?
What percentage of Americans have debt? Here’s the short answer: According to recent Federal Reserve data, only about 23% of Americans have no debt. The rest (approximately 77%) have some sort of debt.
Some types of debt are far more common than others. Here’s a breakdown of how many people in the U.S. are in debt by category:
- Credit cards: 45.4%
- Mortgages and similar loans: 42.1%
- Car loans: 36.9%
- Student loans: 21.5%
- Personal loans and other installment loans: 10.5%
- Debt secured by property (not primary residence): 4.7%
- Credit lines not secured by property: 1.5%
- Other kinds of debt: 5.2%
As you can see, credit card debt is more common among Americans than any other type of debt. However, the Center for Microeconomic Data notes that mortgages account for the majority (70%) of outstanding consumer debt balances.
This means that fewer people have mortgages than credit cards, but the average mortgage balance is much higher than the average credit card balance.
One of the most important lessons to take away from this is that debt isn’t inherently bad, and you’ll almost inevitably take some on eventually. You might use it to fund your education, gain necessary transportation, or purchase a home.
Instead of avoiding all debt, you should be wary of unproductive debt, especially high-interest forms like credit card debt. If you have “bad” debt, prioritize paying it off as soon as possible, potentially even over other types of debts.
Is the Average American in Debt?
Most Americans have long had some level of debt, and if you’ve taken on more due to the rapid rise in the cost of living, you’re not alone. According to Experian, the total consumer debt in the U.S. has steadily grown over the past few years.
Here’s a closer look:
- 2023: $16.90 trillion
- 2024: $17.76 trillion
- 2025: $18.33 trillion
Between 2024 and 2025, the total consumer debt balance increased 3.2%. With the exception of retail credit cards, it also increased across every category of debt, including HELOCs (11.3%), student loans (5.8%) and credit cards (6.4%).
Tips for Reducing Debt
Being in debt can be discouraging, but getting out is far from impossible. If you want to reduce and eventually eliminate your debt, these tips can help you get started.
Pick a Repayment Method
Choosing a repayment strategy can help you stay focused and motivated. Financial advisors often suggest choosing one of these two popular debt-repayment strategies:
- Snowball Method: Make all minimum monthly payments and concentrate any extra funds on the debt with the smallest balance to build momentum.
- Avalanche Method: Make all minimum monthly payments and concentrate any extra funds on the debt with the highest interest rate to minimize costs.
Of course, you aren’t limited to these two methods. If something else works better for you, do it! The important thing is to have a plan you can follow consistently.
Look for “Money Leaks”
When you cut your spending, you’ll have more money to put toward paying off your debt. If you’re already on a tight budget, cutting back can be tough. Look for small non-essentials (like subscriptions you rarely use) that you can get rid of.
Boost Your Income
You don’t have to find a new job to increase your income. Picking up a side hustle or selling unused items online can help you pay down debt faster.
Consolidate Your Debt
If you have several different high-interest debt accounts (like multiple credit cards), you might consider consolidation. A consolidation loan lets you roll all of your monthly payments into one.
Don’t Take on New Credit
As you work to pay off your debt, it’s critical to avoid taking on new debt. Doing so can quickly erase your progress.
Talk to a Credit Counselor
Many people struggling to pay down their debt could use a little extra guidance. If you’re looking for help, credit counseling may be the right choice. Your credit counselor can help you formulate and stick to a personalized plan.
Don’t Be Discouraged if You Have Debt
If you’re feeling embarrassed or ashamed of your debts, know that you’re not alone. There has been a widespread increase in consumer debt over the past several years due to factors like rapidly rising costs, high interest rates, and stagnant wages.
Despite these challenges, getting out of debt is possible. Start by choosing a repayment strategy you can stick to, then look for ways to trim expenses and increase your income—even if it’s only incrementally. And if you need expert help, don’t hesitate to reach out to a credit counselor.
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