Survey responses to the question, 'What is the most likely reason you have debt or are struggling with debt?'. Graphic: GOBankingRates

By Cameron Huddleston
8 November 2018

(GOBankingRates) – Debt truly is a four-letter word for many Americans. It can lead to stress, sleepless nights and fighting in relationships. It can force you to live paycheck to paycheck and prevent you from getting ahead financially.

Because debt is such a widespread problem in the U.S., GOBankingRates set out to uncover why Americans are in debt. More than 5,000 adults were surveyed to find out how much debt they have, when debt became a burden in their lives, how they deal with debt and how their lives would be different without debt.

Keep reading to find out how and why Americans are drowning in debt.

Household Debt Continues to Rise in the U.S.

Household debt in the U.S. is at an all-time high of $13.29 trillion, according to the Federal Reserve Bank of New York. That’s $618 billion higher than the previous peak of $12.68 trillion in 2008 during the Great Recession.

How Much Debt Americans Have, by Category
Category Annual Change* Total as of Q2 2018
Mortgage Debt +$308 billion $9 trillion
Home Equity Line of Credit -$20 billion $432 billion
Student Loan Debt +$61 billion $1.41 trillion
Auto Loan Debt +$48 billion $1.24 trillion
Credit Card Debt +$45 billion $829 billion
Total Debt +$454 billion $13.29 trillion
*Change from Q2 2017 to Q2 2018
Source: Federal Reserve Bank of New York

The biggest contributor to the rise in household debt is growing mortgage debt, which is $9 trillion as of the second quarter of 2018, according to the New York Fed. The second biggest source of debt in U.S. households is student loan debt, which is $1.4 trillion.

How Much Debt Americans Have in 2018: By Age and Gender

The GOBankingRates’ survey found that the average debt among the more than 5,000 adults it polled is $52,458.

Overall Debt by Age and Gender
Age/Gender Average Debt
18-24 $28,090.77
25-34 $58,216.71
35-44 $68,233.57
45-54 $57,901.95
55-64 $53,694.77
65 and over $48,066.73
Females $50,123.50
Males $55,080.53
Source: GOBankingRates survey

Men tend to have a bigger debt burden, on average, than women — $55,081 versus $50,124. And adults ages 35 to 44 have the highest average debt of all the generations — $68,234 — followed by adults ages 24 to 35, with $58,217.

44% of Americans Claim Low Income Is the Primary Reason for Being in Debt

To find out why debt levels are growing in the U.S., the GOBankingRates’ survey asked respondents to pinpoint the reason they most likely have debt. Respondents could choose more than one of the following answers:

  • I spend frivolously/I don’t have a budget
  • My income is too low/I don’t make enough money
  • The cost of living in my city/state is too high
  • I don’t know enough about debt and how to pay it off
  • My college/university was too expensive
  • My debt keeps rising
  • I applied for a loan/credit card I can’t really afford
  • Other

The most common reason respondents gave for why they have debt is a low income, with 44 percent choosing this response. A high cost of living and expensive college education are the second-most common reasons why respondents said they are struggling with debt — with both chosen by 20 percent of respondents. Seventeen percent of respondents chose “Other.” [more]

Americans Are Drowning in Debt — a New Survey Finds Out Why



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