NerdWallet's Annual Household Debt Study Finds Average American Household Carries $15,355 in Credit Card Debt

Americans Could Spend up to 44 Years Paying Down Credit Card Debt Due to Cost-of-Living Increases and High Interest Rates

Dec 09, 2015, 09:00 ET from NerdWallet

SAN FRANCISCO, Dec. 9, 2015 /PRNewswire/ -- According to NerdWallet's Annual American Household Credit Card Debt Study, the total amount of debt owed by U.S. consumers has reached $11.91 trillion, with the average indebted household owing $15,355 in credit card debt alone. As one of the most expensive types of debt, credit card debt costs consumers an average of $2,630 per year in interest, assuming an average APR of 18 percent.

"It's alarming that household debt is on the rise, but it's also important to recognize that not all debt is created equal," says Sean McQuay, NerdWallet's Credit Card Associate. "Under the right circumstances, mortgage, student and auto loan debt can be helpful in building a bright financial future. That said, it's critical for Americans to understand their debt and recognize that certain types of debt are unnecessarily costly."

U.S. Debt: By the Numbers


Debt owed by average indebted
U.S. household

Total debt owed by U.S. consumers

Credit cards

$15,355

$712 billion

Mortgages

$165,892

$8.12 trillion

Auto loans

$26,530

$1.03 trillion

Student loans

$47,712

$1.21 trillion

Total

$129,579

$11.91 trillion

The 'Why' Behind Debt in the U.S.

NerdWallet's Annual American Household Credit Card Debt Statistics Study analyzes data from several sources, including the New York Federal Reserve and the U.S. Census Bureau, as well as a study conducted online by Harris Poll commissioned by NerdWallet. Key findings include:

  • The cost of living is outpacing income growth. While median household income has grown 26 percent since 2003, household expenses have outpaced it significantly — with medical costs growing by 51 percent and food and beverage prices increasing by 37 percent in that same span.
  • Interest payments add up. The average household already is paying a total of $6,658 in interest per year, which means that 9 percent of the average household income ($75,591) is being spent on interest alone.
  • Credit card debt is particularly costly. The average American household with credit card debt could spend up to 44 years paying it down if only making the minimum payments each month.

"A big part of getting out of debt is admitting you have a problem. Unfortunately, debt -- particularly credit card debt -- carries a stigma that can be very damaging and counterproductive," says McQuay. "An online survey we commissioned Harris Poll to conduct found that 35 percent of Americans consider credit card debt to be the most 'embarrassing' debt to tell others about having and 70 percent think there is a greater stigma around credit card debt than any other type of debt. If this stigma leads to avoidance and inaction, we're in trouble. Americans need to come to terms with their debt and make an active plan to climb out of it."

Debt Resources

About NerdWallet
NerdWallet gives consumers clarity around key financial decisions at every stage of their lives. When it comes to credit cards, insurance, loans or expenses such as hospital costs, consumers make almost all of their decisions in the dark. NerdWallet is changing that, helping guide consumers' decisions with free, accessible tools, research and expert advice that can't be found anywhere else. We call it putting knowledge in your wallet.

Full Study Methodology can be Found Here

Harris Poll Methodology
This survey was conducted online within the United States by Harris Poll on behalf of NerdWallet from November 2-4, 2015 among 2,017 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Keely Spillane (kspillane@nerdwallet.com).

Contact
Keely Spillane
kspillane@nerdwallet.com
925-200-2215

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SOURCE NerdWallet



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