A new report from CNBC and Experian highlights the struggle many Americans face when it comes to personal debt. According to the findings, the average American has over $90,000 in debt. Here are the full results and tips on tackling your personal debt burden.
Average American Holds Nearly $100k in Personal Debt
CNBC and Experian have joined forces to release a new report that details Americans’ average debt across all ages.
The major highlight of the report is the average personal debt of Americans: $90,460. This debt breaks down as a combination of various types of debt amounts, including student loans, mortgages, credit cards, auto loans, HELOCs (home equity lines of credit), and personal loans.
Debt Breakdown by Age Group
The report notes the average debt by age group as follows:
- Silent generation (ages 75+): $40,925
- Baby boomers (ages 56 – 74): $96,984
- Generation X (ages 40 – 55): $135,841
- Millennials (ages 24 -39): $78,396
- Generation Z (ages 18 – 23): $9,593
The youngest consumers, Gen Z, have the lowest debt burden. However, this age group is also the newest to credit and the most likely to miss payments. Experian notes in the report that 12.24% of credit card accounts were 30 days (or more) past due for Generation Z.
Generation Xers had the most debt, with the largest balances on student loans, auto loans, credit cards, mortgages, and HELOCs.
Interestingly, Experian notes that the two oldest age groups have seen a significant drop in debt since 2015. Baby boomers reported a 7.5% drop in personal debt, while the silent generation has seen a 7.7% decrease in debt during the same period.
How to Tackle Debt
The good news from the report is that carrying debt is a normal part of life. While borrowing money is practically part of Americans’ daily lives, ensuring you can service that debt is essential.
The best way to ensure you can handle your debt is by keeping your credit score up. Maintaining a good credit score is critical for ensuring you lock in the best loan rates and terms. This ability to receive the lowest rates starts from making on-time payments every month and keeping your accounts in good standing.
Other debt advice includes:
- Paying more than the minimum amount due each month to reduce overall statement balances
- Consolidating loans with higher interest rates with a balance transfer credit card or personal loan
- Monitoring your credit score
- Keeping older credit card accounts open to maintain a higher average age of credit
- Keeping credit utilization below 30%
Related Article: How to Negotiate a Lower Credit Card Interest Rate