Americans have less personal debt than they did before the pandemic, according to data analyzed by Money.com showing the average adult owes a little under $22,000.
Research from financial services company Northwestern Mutual found that excluding mortgages, the average personal debt per individual arespondents sat at $21,800 in 2023, significantly lower than the $29,800 recorded in 2019.
At the same time, Americans have wildly different experiences with their debt: While more than a third of Americans said they're carrying their highest level of debt ever, an even greater share reported the opposite. The latest New York Federal Reserve data also shows that rising credit card debt and auto loans helped push U.S. household debt to new records in the fourth quarter of 2023.
Northwestern Mutual and the Harris Poll interviewed 2,740 U.S. adults online between mid-February and early March of 2023. Here are some of the findings:
Credit cards are the main source of debt for U.S. adults, accounting for more than double any other source cited by survey respondents.
Americans have been making consistent progress when it comes to paying off their debts, according to the survey, even reducing what they owe over the course of a period of historic inflation. While the report didn't explore how Americans are paying down debt, the data shows the average debt per individual declined the most (by $6,475) between 2019 and 2021. By comparison, debt per individual dropped by $1,525 between 2021 and 2023.
During those early pandemic years, many workers grew their savings and eliminated debt by spending less money, working remotely, and stashing away their stimulus checks. In surveys, many people say they used their stimulus checks for savings or paying off debt, which can help improve one's credit in instances.
Even though the report suggests Americans are reducing their debt overall, that doesn't mean everyone's circumstances are alike, as shown by the survey's divide between those who say they owe the most or least debt ever.
In fact, U.S. household debt grew by $16 billion between April and June of 2023, according to the New York Fed, driven in large part by high interest rates on credit cards: The average credit card APR now sits at more than 20%. Auto loan balances also increased by $20 billion in that time thanks to inflation and high interest rates. Delinquencies related to credit card debt and auto loan debt have been rising recently as well.
Regardless, Americans should do their best to stick to their repayment strategies to continue the trend of consistent declines in debt levels recorded by the Northwestern Mutual study.
This story was produced by Money and reviewed and distributed by Stacker Media.