The Truth About America’s Debt Crisis
- UpdatedOct 31, 2024
- The average American has about $16,000 in credit card debt.
- Increasing credit card balances means you are spending more than you earn. This is not sustainable.
- Debt relief may be an option for those who cannot afford to pay off their credit cards.
It’s no secret that the United States is a country that runs on debt. Stagnant wages, higher cost of living, and the inability to pay off what we owe keeps more and more people stuck in the red. What used to be a common headache has quickly grown into a larger financial epidemic.
According to the Federal Reserve, Americans now collectively carry more than $1 trillion in revolving debt. It’s a startling milestone, but the problem is only getting worse. Here’s what’s happening in the American debt crisis.
Where is the money going?
To take a deeper look, the average U.S. household has over $16,000 in credit card debt. Families increasingly rely on credit cards just to cover daily expenses, and approximately 10 percent of their income is used to pay non-mortgage debts.
This is worrisome because many people barely have enough money to pay for basic necessities. So, when unexpected financial hardships arise, they’re forced to dig themselves into even deeper debt, worsening the American debt crisis even further.
It’s a harsh cycle, but what’s more alarming is the fact that so many people who are struggling with debt only make minimum payments on their accounts.
Put your money to better use
If you aren’t paying your credit cards in full each month, you could be wasting far more money than you realize. All of the money you’re paying on interest could go towards building a stronger financial future instead.
Needless to say, only making minimum payments isn’t an effective or cost-friendly way to deal with debt. You could easily spend decades trying to pay off your credit cards and still not be able to clear it off.
So, what’s the solution?
While it may seem impossible to get rid of heavy credit card debt, there is a smarter way out. Here at Freedom Debt Relief, we’ve created a program that helps people solve their debt problems; and it doesn’t involve a debt consolidation loan, so good credit isn’t required.
If you’re part of the American debt crisis and are struggling with debt or worried about falling behind on payments, it might be time to take action. Freedom Debt Relief is here to help you understand your options for dealing with your debt, including our debt relief program. Our Certified Debt Consultants can help you find a solution that will put you on the path to a better financial future. Find out if you qualify today.
Learn More
How to Get Out of Credit Card Debt (Freedom Debt Relief)
U.S. Credit Card Debt Hits All-Time High, and Overdue Payments Rise for Young People (NPR)
U.S. Household Debt in Four Charts (Reuters)
Debt relief stats and trends
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during September 2024. The data uncovers various trends and statistics about people seeking debt help.
Debt relief seekers: A quick look at credit cards and FICO scores
Credit card usage varies significantly across different age groups, reflecting diverse financial needs and habits.
In September 2024, the average FICO score for people seeking debt relief programs was 577.
Here's a snapshot by age group among debt relief seekers:
| Age group | Average FICO 9 credit score | Average Credit Utilization |
|---|---|---|
| 18-25 | 566 | 90% |
| 26-35 | 572 | 84% |
| 35-50 | 572 | 84% |
| 51-65 | 579 | 82% |
| Over 65 | 595 | 81% |
| All | 577 | 83% |
Use this data to evaluate your own credit habits, set financial goals, and ensure a balanced approach to managing credit throughout your life.
Home-secured debt – average debt by selected states
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.
In September 2024, 25% of the debt relief seekers had a mortgage. The average mortgage debt was $236504, and the average monthly payment was $1882.
Here is a quick look at the top five states by average mortgage balance.
| State | % with a mortgage balance | Average mortgage balance | Average monthly payment | |
|---|---|---|---|---|
| California | 20 | $391,113 | $2,710 | |
| District of Columbia | 17 | $339,911 | $2,330 | |
| Utah | 31 | $316,936 | $2,094 | |
| Nevada | 25 | $306,258 | $2,082 | |
| Massachusetts | 28 | $297,524 | $2,290 |
The statistics are based on all debt relief seekers with a mortgage loan balance over $0.
Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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