Experian Study: Average U.S. Consumer Debt and Statistics

Overall Debt Levels Slow but Still Increase

The total consumer debt balance increased to $17.1 trillion in 2023, up 4.4% from 2022's $16.38 trillion total. Growth in 2023 was slower than the 7% increase from 2021 to 2022. With the exception of student loan debt, almost every major category of consumer debt increased in the 12 months that concluded with Q3 2023.

"Consumers appear to be in a solid position to continue spending and supporting growth in 2024, even as the climb in credit card debt has some ringing the alarm," says Joseph Mayans, Experian's director of U.S. economics. "When adjusted to account for the rapid income growth over the last couple of years, overall debt loads still sit below their pre-pandemic levels and remain historically low."

Mortgage debt, which comprises nearly two-thirds of all consumer debt, grew at a modest 3.2%, to $11.6 trillion as of Q3 2023. Skyrocketing mortgage rates—which only began to subside toward the end of 2023—discouraged many would-be homebuyers from purchasing the relatively fewer homes on the market. High mortgage rates and a poor housing supply also discouraged existing homeowners from selling, keeping their homes off the market and further compounding market constraints.

Source: Experian data from Q3 of each year

Meanwhile, in 2023, auto loans became the second largest debt category. Although the total auto loan balance remains just one-tenth the size of mortgage debt, the $1.5 trillion owed on new and used vehicles is spread across a larger percentage of the population: There are over 100 million auto loans among consumers, versus some 53 million mortgages, according to the Consumer Financial Protection Bureau and Black Knight, respectively.

The total amount owed on auto loans increased by 7.1% through Q3 2023, as higher rates—as well as auto scarcity that stuck around until mid-2023—contributed to higher auto financing costs.

One sector where consumers couldn't, or wouldn't, pass the buck on high interest rates in 2023 was credit card debt. As the Federal Reserve ratcheted up rates throughout 2023, those increases materialized in higher interest charges for consumers, not the least being consumers carrying credit card balances from month to month. Total credit card balances grew by 17.4%, to just over $1 trillion. (Over that same period, retail credit card debt also grew by a similar percentage, 15.3%.)

Source: Experian data from Q3 of each year

Personal loans and home equity loans have always been a traditional way to consolidate or lower the interest rate of higher-cost debt—usually credit card balances. And although both are a smaller slice of overall consumer debt, their double-digit increases suggest that at least some household debt is being refinanced. In the case of home equity loans, some of the 17.6% increase is also attributable to an increase in home renovation activity, another side effect of a nearly frozen residential real estate market.

Finally, student loan balances remained largely unchanged in Q3 2023, as Experian data only captures the period when no student loan payments were required, and no interest was being assessed on existing student loans until September 2023. As loan repayments impact consumer pocketbooks in 2024, however, a clearer picture of student loan repayment activity will become clearer.

Source: Experian data from Q3 of each year
Note: Average personal loan balance includes both unsecured and secured loans

Southern States See Higher Growth in Average Consumer Debt Balance

Average debt balances increased in every state in 2023. The larger increases were in Southern states: Alabama, Florida, North Carolina, Oklahoma, South Carolina and Texas each saw average total debt balances increase by 4% or more, versus the national average of 2.3% growth. Lower average FICO Scores in these states may mean that overall financing consumer debt costs borrowers more in these states versus other areas with stronger average credit scores.

Source: Experian data from Q3 of each year

Average Overall Debt Increased Most for Those With Poor Credit

Although consumers with poor credit have far less overall debt than consumers with better credit scores, the balances they're carrying increased significantly from 2022—more than 20%. Borrowing costs for these consumers were already high when the year began and were only ratcheted higher as interest rates climbed. More of these consumers also owe additional fees due to falling behind on credit payments.

Source: Experian data from Q3 of each year

"There are some consumers in the less-than-prime segments that have been accumulating debt at an accelerated pace, likely due to the rise in the cost of everyday items," says Experian's Mayans. "That may continue to cause strain in 2024, especially as the post-pandemic jobs boom that drove red-hot wage gains and easy job hopping for many lower-income workers comes to an end."

Older Generations Shed Some Debt While Younger Consumers Carry More

Across the generations, older consumers began to shed some of their overall debt in 2023, while millennials and Generation Z saw their debt balances grow by 8% and 15.4%, respectively. Generation X registered a modest increase of 1.9% in 2023.

Source: Experian data from Q3 of each year; ages as of 2023

Although the double-digit increase among Generation Z may lead one to reach for those old avocado toast cliches, the 15.4% increase was largely due to young consumers taking on debt for the first time with new student loans and credit cards. Meanwhile, older consumers have long since sent their last child to college, and mortgages (if present at all) are nearing payoff among older consumers.

Mortgage Debt Increases Alongside Higher Mortgage Rates

Although the housing market remains subdued, as fewer existing houses were sold in 2023 than any year since 1995, home prices remain elevated. Most new homeowners are likely paying much more in mortgage interest than their more established neighbors.

But most homeowners—even millennials with average mortgage balances of $300,000—are presumably content with their situation, as their home equity has in most cases increased in recent years, according to CoreLogic's Homeowner Equity Insights report.

Source: Experian data from Q3 of each year; ages as of 2023

What's perhaps surprising about the data is that average mortgage debt balances saw a relatively modest increase. Average home prices have increased by 4% percent over the past year, but average mortgage rates more than doubled, to a 7% APR for a 30-year fixed-rate mortgage.

It's these rate hikes that are chiefly responsible for putting homes out of reach of consumers in 2023, as typical monthly payments swiftly increased. The national median mortgage payment for conventional loan applicants was $2,180 in September 2023, according to the Mortgage Bankers Association, up from $1,373 in September 2021, when conventional mortgages were just starting to increase from what had previously been a steady 3% APR.

Auto Loan Debt Moderates for Most Generations

Cars are still more costly to buy, insure, repair and drive than they were three years ago. While the sticker prices are still high, they leveled off in 2023 as the automotive market has mostly recovered from supply shortages that prevailed from 2020 through 2022, when buyers struggled to find a new or used car to purchase at any price.

Nonetheless, consumers have generally been able to keep a lid on auto loan balances: The 4% to 6% increases in average balances in 2023 were greater than the 8% to 11% increases in 2022.

Source: Experian data from Q3 of each year; ages as of 2023

Student Loan Debt Flat in 2023; Now Payments and Debt Cancellations Resume

Federal student loan repayments and interest remained paused throughout the 12 months observed in this year's Consumer Debt Study, so this data won't shed much light on the more important questions for student loan borrowers in the months ahead.

However, as Experian reported last year, student loan balances have already declined by more than $120 billion since early 2020. This reduction is due to a combination of factors, including loan cancellation programs and borrowers making the choice to continue paying down their debt despite payments not being due for more than three years.

Gen Xers Carry Significantly Larger Average Credit Card Balances

Credit card burdens by age fall into roughly three groups. The oldest and youngest generations, for differing reasons, have significantly less average credit card balances than the overall average. Millennials and baby boomers, the two largest generations in the U.S., fittingly have average balances that are similar to the overall consumer average.

And then there's Generation X: Among these consumers, who are in their mid-40s to mid-50s, average credit card balances of $9,123 are 40% greater than the national average of $6,501. However, these are also consumers who are in their peak earning years. Also, Generation X is the generation most likely to have the richest credit mix. That may sound like a flex, but in practical terms it means these consumers are likely to have multiple monthly payments to service—think student loan, mortgage, credit card and car payments.

Source: Experian data from Q3 of each year; ages as of 2023

Personal Loan Debt up; Some Borrowers Continue to Pivot to Fixed-Rate Loans

Source: Experian data from Q3 of each year

Both types of personal loans grew at double-digit rates in 2023 as debt consolidation became the primary animating factor to get consumers out of increasing variable-rate credit balances, where average APRs now routinely exceed 20% even for consumers with good or better credit.

Source: Experian data from Q3 of each year.
Note: Balances include both secured and unsecured personal loans

Consumer Debt in 2024: Credit Card, Auto Loans in Focus

Throughout 2023, rising interest rates on variable-rate credit cards, and the attendant burden it places on the consumer, was a constant cause of concern among market observers. If the $1 trillion in total credit card balances isn't a concern, then the willingness of banks to lend unsecured credit to consumers is. Yet, despite some tightening being observed among lenders, an abrupt halt to extending new credit to consumers hasn't materialized.

"Consumers with jobs tend to be able to pay their bills and continue spending," says Mayans. "While economists see a moderate increase in unemployment in 2024, which could put pressure on some households, that stress is likely to be broadly counterbalanced by solid wage growth and the continued easing of inflation."

Even though the Federal Reserve declared last December that no further interest rate hikes should be expected, market observers are still concerned about the resiliency of the consumer in the face of rising debt balances, or, in the case for many consumers, the reintroduction of a new monthly student loan payment on top of other monthly bills.

Fortunately, entering 2024, average wages continue to outpace inflation, and unemployment remains below 4% nationwide. Consumers will need those raises: In the short term, consumers can service high-interest debt, but only at the cost of curtailing new spending—thus reducing economic activity. The more the consumer has for either spending or saving, and the less that's required to service debt, the more likely the economy can grow without inviting a new bout of inflation.

Keep an eye out for Experian reports on individual types of consumer debt over the next few months, as interest rates are likely to change in 2024, which will have ripple effects throughout the economy.