The Demographics of American Debt

Surprising Findings about Who Owes How Much

The Demographics of American Debt
January 6, 2015

We frequently hear about America’s increasing consumer debt, and rightfully so. According to the Federal Reserve, as of July 2014, the total consumer debt in America was almost $3.2 trillion, without considering debt associated with mortgages. Including mortgages, credit card, and student loan debt, the total consumer debt has topped $11.6 trillion and may have reached $11.7 trillion by the time you read this.

One analysis of Federal Reserve data concluded that as of September 2014, the average credit card debt of indebted U.S. households is over $15,000, mortgage debts are $153,500 on average, and student loan debt has risen 11.5% over the last year to an average approaching $33,000. has looked into the demographics of our debt – how the amounts break down by various classifications. The demographics data is older than the above data and dispersed among different time periods, so while the findings are relevant, they may not reflect the current debt situation.

The most recent information on debt demographics comes from a study by the national research organization Demos in 2012. Considerations were given to six different classifications, as shown below.

  • Ethnicity – Demos found that Caucasians carried more credit card debt than African-American or Latino cardholders ($7,315 compared to $5,784 and $6,066 respectively). In one bit of good news, all three groups reduced their credit card debt between 2008 and 2012. Unfortunately, some portion of this is probably through bankruptcy.

  • Age – While older Americans are less likely to have mortgage debt or student loan debt, they are more likely to have credit card debt. The 2012 Demos study found that those 65 years old or greater carried an average of $9,300 on their cards, compared to nearly $8,200 for 45-64-year old cardholders, $6,200 for 35-44-year old cardholders, and $5,200 for those between ages 25 and 34.

  • Income – You might think higher income produces lower debt, but concluded otherwise. Higher income tends to correlate to higher debt, presumably either through being better able to manage long-term debt (if you are an optimist) or overspending because you can (if you are a pessimist). It does make sense that the more you make, the more credit you have available to you, and consequently the more likely you are to use it. Some of the billionaires buying beachfront property in Malibu are probably taking on some huge mortgages because they can.

  • Education – Higher education produces greater student loan debt, as expected, and it can have ramifications for future earnings and wealth. However, the 2012 Demos survey reported that those with college degrees were considerably less likely to have corresponding credit card debt (by 22%) than those without degrees.

    Debt for the more educated appears to be tilted more toward student debt (and likely mortgages, given that they are likely to buy more expensive homes), while the less educated incur more credit card debt.

  • Family Type – In this area, which was based on an older survey, there was nothing surprising. The percentage of people with credit card debt increased as they married and had children (and therefore, more expenses). 21% of singles reported having credit card debt, compared to 27% of childless married couples and 36% of those married with children.

  • Gender – also mentions a gender gap, pointing out that studies show an immediate income gap between men and women, ultimately resulting in women having higher average debt. However, other surveys claim that men on average carry 4.3% more debt than women (and to nobody’s surprise, are slower to seek help with it).

It isn’t surprising that there are data conflicts in this area, because methodology can vary widely. However, even if the debt gap is not clear, it is generally accepted that a gender wage gap remains.

Other findings of the Demos study are quite predictable. Key indicators of credit card debt include a lack of insurance coverage (20% more likely to be indebted), unemployment (14% more likely when unemployed for at least two months), and negative equity in your home (24% more likely).

Regardless of how America’s debt is distributed, we all agree on one point – there is too much of it.

If you want to settle outstanding debts for less than what you owe, try our debt settlement tool.

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