Who Has the Most Debt? Average American Debt by Age

Updated : August 9th, 2022

Average Debt by Age

Who has the most debt? Different generations have unique ways of handling money when it comes to personal finance and consumer borrowing.

According to credit rating bureau Experian, the average consumer is carrying a burdensome load of $96,371 in debt. Consumer debts increased 5.4% in 2021, which is more than double the amount it increased the year before. Numbers like these seem to bode poorly in terms of personal finance for the average American consumer. But like any statistic, a little more nuance is needed to understand if our perspective on debt matches the reality of consumer debt as it applies to different demographics.

As it turns out, different generations have different stories when it comes to the intersection of personal finance and consumer borrowing – credit cards, auto loans, student loans, and other types of financing, secured and unsecured.

Gen Z: Average Debt $16,043

Consumers aging from 18 to 23 have about $16,043 in debt, with an average of $1,963 in credit card debt. Banks today make credit cards seductive, offering points and cash back in return for purchases – then they encourage carrying a balance by requiring low minimum payments. Banks also market to college students, which perhaps explains why around 12% of their debt is from credit cards alone. CPA and financial analyst Greg McBride describes it as the most dangerous kind of debt, with the highest interest rate.

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Millennials: Average Debt $87,448

Millennials range from their mid-20s to 40 years of age.

These consumers are carrying a significantly larger amount of debt that averages $87,448. Much of that is found in the $39,000 they owe on student loans. Around $5,575 of their debt total is credit card debt. Millennials are notorious in the credit analyst world for carrying bad debt: credit cards, car loans, and maybe HELOCS, as opposed to mortgages and student loans. Some pundits have pointed to a weak job market in the wake of the 2007 Great Recession as a culprit. In the absence of employment that could cover spending habits, Millennials were forced to use credit.

Generation X: Average Debt $140,643

Gen Xers aged from 41 to 56 have more debt than any other generational demographic, carrying an average debt of $140,643, around $45,000 of which are student loans. In terms of credit card debt, they are looking at an average of $7,923. One reason that Gen Xers carry such high amounts of student loan debt is that they were the first generation to enter a job market that demanded postsecondary education and even graduate education, which of course for most consumers, means more student loans.

Baby Boomers: Average Debt $97,290

Baby Boomers, aged no more than 75, carry around $97,290 in debt, which is more than Millennials but significantly less than Gen Xers. A small fraction of this debt, around $6,043, is credit card debt. Facts like this indicate that boomers may have a better grasp on personal finances. This is the generation of all the ones discussed here that has the best credit, with an average credit score of 731…although we should mention that the generation before them (The Silent Generation) has an average credit score that is even better at 757. From this set of statistics, it would seem that wisdom really does come with age – including when it comes to credit.

Debt Statistics

While it’s helpful to take in each generation, it’s also helpful to compare some overarching stats. Generation X (41 to 56) has the highest credit card debt, while Generation Z (18 to 23) has the lowest. Generation X has the highest auto loan debt ($21,570), mortgages ($224,500), and as mentioned, student loans. Millennials have seen the largest debt increase over the last five years, a whopping 58%. And although Gen Z has the least amount of debt, they are the worst at paying their bills on time, with over 12% of accounts past due by more than 30 days as of 2019.

Keep in mind there are other factors at work, such as location. The state with the highest average credit card debt is Alaska ($7,758), while the state with the lowest is Mississippi ($5,041). You might not be surprised that consumers with higher amounts of credit card debt live in states with higher living expenses, while consumers with lower amounts of debt live in states with lower living expenses. California, New York, and Hawaii are all in the top ten, while Mississippi, Kentucky, and Wisconsin are the bottom three. Another factor is credit score, which indicates, generally speaking, how a consumer has used credit – responsibly and wisely or irresponsibly and impulsively.

Is Bankruptcy an Option?

Most consumers need to use debt throughout their lives to finance things they need – a car, a college diploma, and a home. But sometimes debt can fuel the endless race to spend more. American consumers in recent decades have become notorious for living beyond their financial means.

Sometimes, in adverse economic conditions like the 2007 Great Recession, this can be financially ruinous for some families. Credit card debt, student debt, auto loans, mortgages, and HELOCs can all pile up into an insurmountable mountain.

This is the point at which you may want to talk to an attorney about Chapter 7 bankruptcy. There is no shame in bankruptcy – it’s a new beginning, not an ending. Some people may think there is a stigma associated with bankruptcy, but nothing could be further from the truth.

Bankruptcy is like an unbelievable breath of fresh air that alleviates the massive, elephant-sized burden you have been carrying on your shoulders. With Chapter 7 Bankruptcy – if you qualify financially in terms of income limits – all of your debts will be waived, with certain exceptions. You cannot discharge student loans or a mortgage with bankruptcy. But you can get rid of pretty much every other form of consumer debt. If your credit card bills have become impossible to pay and you’re getting buried under the interest, bankruptcy is often the best way to resolve insurmountable debt.

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