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Key Figures Behind America’s Consumer Debt

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Debt remains an enormous issue for Americans. The recession that struck 15 years ago threw millions out of work and destroyed nest eggs, and after a recovery had things looking much brighter – consumer debt leveled and even slightly dipped from 2008 to 2012 – the COVID pandemic threw sand into the economy’s gears. Many people have been forced into insolvency or foreclosure, unable to pay their obligations or provide for their families.

It’s not that being in debt in America is a new idea — or even a bad one. Debt allows us to buy homes and cars, send our kids to college, and have things in the present that we can pay for in the future. Indeed, capitalism essentially was built on the extension of credit and the ensuing debt it creates.

There are a number of legal protections for paying back money owed to creditors and also protection from illicit debt-collection practices. There are a small number of federal regulations, and many states use them exclusively. Other states built in varying laws for their residents. Among them are California, Texas, Florida and New York. Among the laws are protections for credit-card holders.

Types of Debt in America

Consumer debt reached $14.56 trillion after the fourth quarter of 2020, according to the New York Federal Reserve.

The debt for Q4 was up $414 billion from the previous year and up nearly $1.9 trillion over the previous record high of $12.68 trillion in the third quarter of 2008.

There has been consistent growth in four main areas of debt — home, auto, student loans and credit cards. Non-housing debt has risen faster, increasing 51% since 2013 compared with a 24% increase in mortgage debt.

Home — Total mortgage debt rose to $10.4-trillion, an increase of $1 trillion from the same juncture in 2017.

But the increase is a good thing overall. The rise of mortgage debt is an indication of recovery in the housing market. Household debt has been growing for five years, but mortgage balance growth has been on a slower incline since it stopped declining in 2013.

Auto — Total auto debt in Q4 of 2020 is $1.37 trillion, a jump of $100 billion from the same time in 2018.

When the Federal Reserve lowered interest rates in 2008 to fight the recession — giving consumers more incentive to pursue the typical three-to-five year loan for autos — it kick-started a trend that has held true today. Auto loans continue to increase because of low-interest rates.

Student Loans — They continue to escalate, growing to a record $1.56 trillion in Q4 of 2020, up $100 billion from the same juncture in 2018. The average student debt in 2020 was $38,792.

When the federal government assumed control of the student-loan program in 2010, replacing previous administrator Sallie Mae, costs were cut and the availability of education assistance was increased. The loans are guaranteed and it’s seemingly a win-win — lower interest rates to encourage higher education — although the rise of student-loan debt has been staggering.

Credit Cards — Credit-card loans were $820 billion in Q4 of 2020, reflecting a drop in consumer spending during the pandemic after this debt category peaked at $930 billion a year earlier. Credit card debt actually fell in 2020, the first drop in any major consumer debt category in seven years.

When the Bankruptcy Protection Act of 2005 was passed, making it more difficult for people to file for bankruptcy, there was a turn toward credit cards in a desperate attempt to pay bills. So credit-card debt soared, reaching its all-time peak of $1.028-trillion in July 2008 (an average of $8,640 per household). Most of that debt was due to unexpected medical bills.

Credit-card use took a hit during the recession, falling more than 10% in each of the first three months of 2009. Banks followed suit, cutting back on consumer lending when the Dodd-Frank Wall Street Reform Act increased regulations over credit cards. By April 2011, credit-card debt fell to $839.6-billion, a figure that has remained somewhat flat, although the average American household still owes $8,398.

Facts and Figures about American Debt

The modern-day credit card — which entered the scene in the late 1950s — has meant far greater buying power for U.S. consumers, but also financial disaster for many individuals and families.

Consider these statistics about personal debt in America:
  • More than 191 million Americans have credit cards.
  • The average credit card holder has at least 2.7 cards.
  • The average household credit card debt is $5,315.
  • Total U.S. consumer debt is at $14.9 trillion. That includes mortgages, auto loans, credit cards and student loans.

The first step to getting help with credit cards is learning about this type of debt. Your goal should be to pay off your credit card debt as soon as possible. Debt consolidation or debt settlement could help you achieve that goal of getting out of debt.


While Americans as a whole carry significant amounts of debt, each state has its own unique problems. The makeup of state-specific debt reflects not just the national economy but also factors like unemployment rates, the worth of homes and the cost of college.

Here’s a quick look at some of the states whose residents have the highest debt levels in the country:


The average Californian owes $371,981 in mortgage debt in 2020, behind only the District of Columbia (the national average is $208,185). And that figure is an increase of 2.2% from 2019.

California, which was deeply affected by the recession that started in 2006, also was hit hard by the pandemic. Its unemployment rate is 8.3%, better than only Hawaii (9.0%) and New York (8.5%), Its home foreclosure rate, once the nation’s highest, fell to was 10th in 2020. California has a below-average credit-card debt at $5,120.

The average Californian carries a $6,222 credit-card balance, which is the 16th-highest mark nationally. The average student-loan balance in California is $28,950, well below the national average of $37,173. That’s an interesting bright spot for a state that produces students who frequently get higher-paying jobs than other parts of the nation.

California residents have an average credit score of 716, which ranks in middle nationally.

Learn more about consumer debt in California.


Florida probably had the most catastrophic effect from the housing-market crash in 2007. The state’s homes lost half their market values and improvement was slow in coming.

But that has changed.

The average Floridian owes mortgage debt of $195,549, an increase of 3.9% from 2019. More significantly, though, about 6.7% of Florida home mortgages are “underwater’’ (meaning the debt is higher than the home is actually worth) to rank ninth nationally. That’s marked improvement from a 2015 study, which listed 30% of Florida mortgages as underwater (and the figure was 44% in mid-2012).

Florida has an average credit-card debt of $6,460, which ranks 11th-highest nationally.

Learn more about consumer debt in Florida.


Massachusetts has the nation’s sixth-largest average mortgage debt at $261,345, a figure that has doubled since 2007 ($126,332). That statistic might seem alarming, but the state has a median household income of $77,385 (which is $17,049 higher than the median U.S. household) and an average credit score of 729 (seventh-highest nationally).

Learn more about consumer debt in Massachusetts.


The unemployment rate — long a nightmare from Michigan residents — has transformed into a positive. From a high of 13.7% in 2009, the figure dipped to 3.9% in 2017, the lowest marker in nearly two decades.

Michigan had the nation’s 12th-highest bankruptcy rate, but its average credit score has improved to 714, three points ahead of the national average. Another positive: The state’s average credit-card debt is $5,399, the 11th-lowest nationally.

Learn more about consumer debt in Michigan.

New Jersey

New Jersey, long known for its high cost of living, has the nation’s ninth-highest average mortgage debt at $241,772. The state also has the nation’s second-highest average credit-card debt at $7,084.

The state’s average credit score is solid at 721. New Jersey also has some of the best and most comprehensive consumer protection laws in the country, regulating nearly every type of transaction.

Learn more about consumer debt in New Jersey.

New York

New York ranks 13th nationally in student-loan debt at $28,650 (Connecticut leads at $38,500), but 60% of 2017 graduates owed money on student loans. That doesn’t help New Yorkers manage their mortgage debt ($241,772, 10th nationally) or credit-card debt ($6,491, 10th).

The state benefits from legislation, including state laws that prevent debt collectors from targeting various types of income such as veterans benefits and child support. Laws also help protect against unfair and misleading tactics in certain home sales.

Learn more about consumer debt in New York.


Ohio is managing to avoid many debt problems despite having only the nation’s 34th best median income.

The state has the nation’s fourth-best average mortgage debt ($125,250), 18th best in average credit-card debt ($5,560) and 23rd best average student loan debt ($37,383). Its average FICO score (711) hits the national average on the nose.

Learn more about consumer debt in Ohio.


Pennsylvania has the nation’s ninth-highest unemployment rate (7.3%) in March 2021. However, its 720 average FICO score is 18th nationally and its average student loan debt ($38,166) ranks 22nd.

Pennsylvania laws are weak when it comes to consumer rights and protections, leading to problems such as high rates of identity theft.

Learn more about consumer debt in Pennsylvania.


In the state where everything supposedly is much bigger, that can certainly be true of Texas’ average mortgage debt. The overall figure ($186,696) didn’t make the nation’s top 10, but it continued several years of steep climbing. The state’s credit-card debt ($6,753) is the nation’s seventh highest.

The average credit score (697) lags behind the national average of 711 (a record high, by the way). It’s possibly a reflection of Texas residents struggling to make on-time payments, which punctures the credit history more than any other factor.

Learn more about consumer debt in Texas.


Virginia is ranked high in credit-card debt ($6,969, fifth), mortgage debt ($245,054, eighth) and student-loan debt ($41,270, fourth).

Virginia continues to have one of the nation’s top median household incomes ($74,222), more than $8,000 higher than the U.S. median. It also has a history of responsible payment patters, reflective of its high average credit score (717).

The state continues to suffer from high levels of consumer fraud and identity theft. There are exceptionally few consumer protection laws.

Learn more about consumer debt in Virginia.

Debt Can Lead to Foreclosure

While the statisticians can supply us with a plethora of facts and on how much debt Americans are in, the human costs of America’s debt problem — though real and serious — are harder to calculate. They reside in the millions of personal stories and countless legal forms and financial files all across the country, and they will be subject to review by the social scientists and economic essayists of the future.

These statistics also shed light on the human cost of debt:
  • Total bankruptcy filings in 2020 — 544,463.
  • Number of homes that went into foreclosure from 2016 through 2020 — 1.8 million.
  • Mortgage delinquency rate in January 2021 — 5.6%.
  • Homes foreclosed upon in first half of 2020 — 1 in 824.

As Americans continue to make slow headway against the financial doldrums of the COVID-19 pandemic, debt repayment will be an important part of rebuilding our lives.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet.


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