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It's Not Just You, We're in More Debt Than Ever

Debt has soared to its highest level ever, for the average American and our nation itself. What’s behind this disturbing trend, and what does it mean for you?

September 6, 2021

Do you ever get the feeling that everyone — and every country — is in debt? If so, you may be onto something. Collectively, we’re in more debt than ever before. 

But if everyone owes money to someone else, who really owns all this debt? What is the average American debt? What has led to the historic surge in debt levels? And what does this mean for you? 

This article seeks to answer some of those questions. And if you’re feeling overwhelmed by your own debt, you can find comfort knowing that, in this journey, you’re far from alone. 

What’s the average American debt per person? 

The average American debt per person has been on the rise, but how much does the typical American owe? And how many people are in debt in this country?

So, what percentage of Americans are in debt? That’s a little tougher to nail down: 

What’s the average American debt by debt type? 

To get a better understanding of debt in America, it’s useful to look at a breakdown of where that debt is actually coming from. Here’s the latest data, according to the same Federal Reserve study referenced above:

Debt Type: Mortgage debt

Average Balance: $36,730

Debt Type: Home equity lines of credit (HELOC)

Average Balance: $1,210

Debt Type: Auto loans

Average Balance: $5,000

Debt Type: Credit card debt

Average Balance: $2,780

Debt Type: Student loan debt

Average Balance: $5,730

Debt Type: Other debt

Average Balance: $1,490

Total debt: $52,940

These figures can be a bit misleading, however, as they’re the national averages for every person.

For example, the total average student loan debt per person is $5,730, as listed in the table above. But the actual average balance among those who took out student loans is $37,693, according to

How much debt is America in?

We’ve talked about Americans, but how about America itself?

  • As of July 2021, the US national debt stands at roughly $28.57 trillion dollars, according to The national debt per person is $85,664

  • At the end of 2020, the total debt was $26.95 trillion, according to the U.S. Treasury Data Lab.

This means the national debt has grown by more than $1.5 trillion dollars in the last six months alone. If you look at the US debt over time graph, you’ll find the number ticks up rapidly over time. 

What happened?

Looking at these figures, one might wonder: how did we get into so much debt? 

On the national level, the explanation is simple: the government is spending more than it takes in, as tax rates have been consistently lowered over the years and spending has increased. The Covid-19 economic response has also greatly increased the federal debt. 

On the individual level, the topic is a bit more complex. Here are some of the reasons why household debt in America has skyrocketed:

  • “Cheap” money. In recent years, the interest rates we pay on loans (particularly mortgages) have fallen to historic lows. This means borrowing money is cheaper than it’s ever been, which encourages people to take on debt.Aggressive marketing. Banks are increasingly aggressive in how they market their products and services, including credit cards. This means Americans are more likely to open new credit card accounts. Plus, marketing in general (for products and services) is very aggressive, leading to increased spending. 

  • Falling real wages. Expenses are going up while wages are staying the same. This has been a decades-long trend, and it’s affecting Americans’ ability to pay their bills. Much of the household debt in America is a result of spending on necessities like groceries and rent.

  • Societal factors. American society has been known to influence our behavior, and debt is a very common theme in American culture. This affects debt levels in two ways: we feel that everyone around us is in debt, which normalizes the situation, and we strive to keep up with the lifestyles of our friends and neighbors, which can increase spending

  • Education and medical costs. The cost of getting a college education has skyrocketed in the past decade, along with medical costs. This creates more student loan debt per person and leads people to take out loans to cover medical expenses. 

The bottom line

Americans are in more debt than ever before, often through no fault of their own. Debt levels are going up as expenses rise, while wages stay the same. But what can we do about it?

It starts by taking charge of your own debt and improving your financial wellbeing. 

For many of us, that means paying off credit card debt, which is typically one of the most expensive forms of debt to carry. 

Tally is a tool thousands of Americans are using to pay off their debt faster and more efficiently. If you’re ready to tackle your credit card debt, consider exploring Tally