The Average American Household Owes $90,336 -- How Do You Compare?

By Matthew

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This debt burden is costing the average household more than $6,600 in interest per year -- about 9% of the average income. Here's what the average American household owes, and what you should do if your debts have gotten too high.

How much do we owe, and to whom do we owe it?According to NerdWallet's 2015 American Household Credit Card Debt Study, the average U.S household with debt owes $130,922 -- including credit cards, mortgages, auto loans, student loans, and other forms of debt. Here's a breakdown of the debts of the average American household as of the fourth quarter of 2015.

Type of debt

Average for households with this type of debt

Total U.S. debt of this type

Households with this type of debt

% of American households with this type of debt (approximate)

Overall average household debt

Credit cards


$733 billion

46.5 million





$8.25 trillion

48.9 million



Auto loans


$1.06 trillion

39.1 million



Student loans


$1.23 trillion

25.5 million



All debt


$12.12 trillion

92.6 million



Data source: NerdWallet.


Good debt vs. bad debtNot all debt is bad. For instance, mortgage debt is considered to be the best kind of debt to have, as long as it's a reasonable amount. Not only are interest rates so low that you should be able to earn better returns by investing your money instead of paying for your home in cash, but mortgage debt is backed by an asset that should increase in value over time.



On the other hand, credit-card debt and other high-interest debts are usually considered bad. There are a few exceptions: for instance, if you have a 0% introductory APR on a credit card. For the most part, however, credit-card debt is excessively expensive, even if you have a high FICO score. The interest you'll pay on a credit card generally outweighs any benefits -- credit score or otherwise -- of carrying the debt. In fact, the $15,762 in average household credit-card debt generates $2,630 in interest charges per year an average APR of 16.7%.

Focus on getting rid of your bad debt firstIf you have credit-card debt, or other high-interest debt (let's say with a rate of 10% or greater), that should be your No. 1 priority. I know it can be tempting to double up on your mortgage or student loan payment if you have extra money, but it's silly to do so if you have higher-interest debt draining your wallet.

The obvious solution is to pay more on your credit cards. Making just the minimum payments can leave you in debt for decades, and even a little extra per month can translate to big savings. However, if you're already paying as much as you can, there are still some things you can do.

  • Another option is a debt-consolidation loan, either from a bank, or a peer-to-peer lender like Lending Club or Prosper. Your interest rate probably won't be as low as, say, a car loan, but it's likely to be significantly better than your credit card's rate.
  • Many people don't realize, but you can call your credit card company and ask them to lower your interest rate if you're struggling to pay down your debt. The worst they can say is no, and you may be surprised at how much they're willing to work with you. After all, it costs them a lot less to shave a few points off your interest rate than it does to send an account to collection.

If you're fortunate enough to not have credit card debt, by all means go ahead and pay down your other debts if you want. Just make sure you do it in the right order -- highest interest first.

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