Total debt
Mortgages and auto loans, by far the two largest components of a consumer's budget, experienced the fastest year-over-year growth of any debt category.
Accounting for 70% of all American debt, mortgage debt carries the highest total at $10.44 trillion. Forty-two percent of households have mortgages. (That's over 51.5 million total American households).
In 2020, Hong Kong, United States, and China had the highest household debt of the selected countries when measured as a share of gross domestic product (GDP). At that time, Hong Kong households held a stock of debt valued at roughly 259 percent of the country's output.
While the average American has $90,460 in debt, this includes all types of consumer debt products, from credit cards to personal loans, mortgages and student debt.
And yet, over half of Americans surveyed (53%) say that debt reduction is a top priority—while nearly a quarter (23%) say they have no debt. And that percentage may rise.
Kevin O'Leary, an investor on “Shark Tank” and personal finance author, said in 2018 that the ideal age to be debt-free is 45. It's at this age, said O'Leary, that you enter the last half of your career and should therefore ramp up your retirement savings in order to ensure a comfortable life in your elderly years.
Japan, with its population of 127,185,332, has the highest national debt in the world at 234.18% of its GDP, followed by Greece at 181.78%.
How much money does the average American owe? According to a 2020 Experian study, the average American carries $92,727 in consumer debt. Consumer debt includes a variety of personal credit accounts, such as credit cards, auto loans, mortgages, personal loans, and student loans.
It pays to take on debt in Switzerland
The steep growth in mortgage debt is partly down to Swiss factors: high prices for real estate, a tax system that provides incentives for indebtedness, and the great significance of the rental apartment market – half of which is owned by private individuals.
Value of household debt in the U.S. 2021, by type
Consumers in the United States had 15.24 trillion dollars in debt as of the third quarter of 2021, the majority of which was home mortgages, at 10.44 trillion U.S. dollars. Student loan debt was the second largest component, totaling 1.58 trillion U.S. dollars.
Household debt is defined as the combined debt of all people in a household. It includes consumer debt and mortgage loans. A significant rise in the level of this debt coincides historically with many severe economic crises and was a cause of the U.S. and subsequent European economic crises of 2007–2012.
What are the main causes of debt? A variety of issues can cause debt. Some causes may be the result of expensive life events, such as having children or moving to a new house, while others may stem from poor money management or failure to meet payments on time.
Key findings
67% of millennials report having credit card debt, while just 36% face student loan debt.
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.
50 years or older = $96,984
Baby boomers have an average debt of $96,984, according to Experian. Mortgages, credit card bills, and auto loans are the three main debt sources for those in this age group. Although this is less than the average debt of those 35—49, it could still spell trouble for two primary reasons.
There are countries such as Jersey and Guernsey which have no national debt, so the pay no interest. All this started with the Napoleonic wars when the government borrowed money to fund the war.
There is only one “debt-free” country as per the IMF database. For many countries, the unusually low national debt could be due to failing to report actual figures to the IMF.
You should aim to have everything paid off, from student loans to credit card debt, by age 45, O'Leary says. “The reason I say 45 is the turning point, or in your 40s, is because think about a career: Most careers start in early 20s and end in the mid-60s,” O'Leary says.
While you should steer clear of high-interest credit card debt, it's OK to use debt intentionally, including taking on a mortgage, using loans to pay for school or financing a car to get you to and from work. As for the ideal age to debt-free, don't get too caught up in the comparison game, says Sanborn Lawrence.
Is being debt-free the new rich? Yes, as long as you have money and assets, in addition to no debts. Living loan-free is a fantastic way to stay financially secure, and it is possible for anyone. While there are a couple of downsides to being debt-free, they are minimal.
And according to data from the 2019 Survey of Consumer Finances by the US Federal Reserve, the most recent year for which they polled participants, Americans have a weighted average savings account balance of $41,600 which includes checking, savings, money market and prepaid debit cards, while the median was only ...