What percentage of Americans are 100% debt free?
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more.
If you have multiple credit cards and loans and feel overwhelmed by debt, you're not alone. Around 80% of Americans are in debt, and escaping it can be challenging. Moreover, Americans are accumulating debt due to factors like inflation and high credit card interest rates after saving more during the pandemic.
However, 35% of Americans reported that they're in the most debt of their lives. New York Fed data shows that U.S. household debt swelled to $17.5 trillion last quarter, with credit card balances making up about $1.13 trillion of it — a new high for credit card debt.
Here's an up-to-date breakdown of the average debt per consumer and total balances across all consumers from Experian data from the third quarter of 2023 and Fed data from the fourth quarter of 2023, respectively. Mortgage debt is most Americans' largest debt, exceeding other types by a wide margin.
In many ways, being debt-free is increasingly being regarded as the new rich. This doesn't necessarily mean having immense wealth in the traditional sense, but rather enjoying financial freedom and the peace of mind that comes with it.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
Average credit card debt in America is $7,951, based on 2022 data from the Federal Reserve and the U.S. Census Bureau. Credit card debt varies due to age/income/other factors, but only makes up a fraction of personal debt. The average consumer's debt in America is $95,067.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
How many people have $50,000 in credit card debt?
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year.
Indeed, men carry more overall debt than women, including across most debt categories. But women carry more student loan debt and often have more credit cards. 1 We go a little more in-depth into this in the next section.
The average FICO credit score in the US is 718, according to the latest FICO data from April 2023. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850. The higher your score, the better.
Are people with less debt happier? Yes, 97% of people with debt say they would be happier without it. People with debt are more likely to suffer depression or anxiety.
Being debt-free is a financial milestone we often hear about people striving for. Without debt, you can focus on building more savings, investing those extra funds and just simply having more peace of mind about your finances.
In 2022, nearly 40% of U.S. homeowners owned their homes outright, according to Census Bureau data analyzed by Bloomberg. In total, 33.3 million single-family homes and condos were mortgage-free, a 31% increase compared to 25.4 million homes a decade ago.
If you are under 45, it's difficult to argue that your dollars would be better served paying off your mortgage unless you are on Step 9, pre-pay low-interest debt. You should aim to be completely debt-free by retirement, and after age 45 you can begin thinking more seriously about pre-paying your mortgage.
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
Between the ages of 55 and 64, many Americans start to think about retirement. But among heads of household who have debt and are in this age bracket, average debt levels stand at $145,740. They might have assets in excess of this debt, but they might have negative net worth.
| How Much Do Americans Have in Their Savings Accounts? | ||
|---|---|---|
| $100 or less | 32.90% | 33.93% |
| $101-$500 | 12.80% | 10.04% |
| $501-$1,000 | 11.30% | 12.58% |
| $1,001-$2,000 | 10.60% | 9.81% |
What is considered a rich salary?
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
A high percentage of Americans have very little discretionary income — the money left over each month to invest, save or spend after covering necessities. About 1 in 5 (22%) say they have less than $50 to their name after buying groceries and keeping the lights on, while 66% have less than $500.
So, when you hear about people who have absolutely no debt, live on less than they make, and have a stash of cash for emergencies, you might think they're . . . weird. But living a debt-free life isn't only for a special group of people. It's something anyone can do with hard work and some special characteristics.
Already a subscriber? A stunning new Bankrate survey of 1,030 individuals finds that more than half of American adults (56%) lack sufficient savings to shoulder an unexpected $1,000 expense.
Nearly half of Americans will start 2024 in the red
Of those who expect to have credit card debt, 74% expect to have $1,000 or more in debt, 42% expect to have $5,000 or more in debt and a quarter (25%) expect to have $10,000 or more in debt.
