The Truth About America’s Debt Crisis
- UpdatedDec 18, 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 by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during November 2024. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit Card Usage by Age Group
No matter your age, navigating debt can be daunting. These insights into the credit profiles of debt relief seekers shed light on common financial struggles and paths to recovery.
Here's a snapshot of credit behaviors for November 2024 by age groups among debt relief seekers:
| Age group | Number of open credit cards | Average (total) Balance | Average monthly payment |
|---|---|---|---|
| 18-25 | 3 | $9,011 | $282 |
| 26-35 | 5 | $12,647 | $390 |
| 35-50 | 6 | $16,172 | $431 |
| 51-65 | 8 | $16,725 | $529 |
| Over 65 | 8 | $17,047 | $499 |
| All | 7 | $15,142 | $424 |
Whether you're starting your financial journey or planning for retirement, these insights can empower you to make informed decisions and work towards a more secure financial future
Credit card debt - average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average credit card debt for those with a balance was $6,021. The percentage of families with credit card debt was 45%. (Note: It used 2022 data).
Unsurprisingly, the level of credit card debt among those seeking debt relief was much higher. According to November 2024 data, 88% of the debt relief seekers had a credit card balance. The average credit card balance was $15,618.
Here's a quick look at the top five states based on average credit card balance.
| State | Average credit card balance | Average # of open credit card tradelines | Average credit limit | Average Credit Utilization |
|---|---|---|---|---|
| District of Columbia | $16,967 | 7 | $24,102 | 121% |
| Arkansas | $12,989 | 9 | $28,791 | 83% |
| Tennessee | $13,822 | 9 | $27,261 | 82% |
| New Mexico | $11,860 | 8 | $25,731 | 82% |
| Kentucky | $12,834 | 8 | $26,156 | 81% |
The statistics are based on all debt relief seekers with a credit card balance over $0.
Are you starting to navigate your finances? Or planning for your retirement? These insights can help you make informed choices. They can help you work toward financial stability and security.
Regain Financial Freedom
Seeking debt relief can be the first step toward financial freedom. Are you struggling with debt? Explore options for debt relief to regain control of your finances. It doesn't matter how old you are or what your FICO score or credit utilization is. Take the first step towards a brighter financial future today.
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