How many Americans are debt free?
Living debt free: 54.2% Living comfortably, but not necessarily being rich: 50% The ability to regularly meet all of their financial obligations and still have some money left over each month: 49.3% Never having to worry about money: 46.2%
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.
Even with that $16.9 trillion shared by about 340 million people, consumer debt statistics show that Americans are feeling the pain.
If you look at all credit card accounts, the American Bankers Association data shows that 43% of accounts were active and carried a balance at some point in the third quarter of 2022, 34% of accounts were active but didn't carry a balance and 23% of accounts were dormant for the quarter.
The numbers are consistently around 60%, meaning only 40% of Americans have enough savings to cover an unexpected expense without going into debt. As of January 2023, the report shows that 57% of Americans have less than $1,000 in savings.
At the end of 2022, 73 percent of adults were doing at least okay financially, meaning they reported either "doing okay" financially (39 percent) or "living comfortably" (34 percent).
Just 1 in 10 respondents to a new survey said that they are living financially free as they see it. And that doesn't mean 'being rich' with just 12% stating that as their definition of financial freedom.
What percentage of America is debt-free? According to that same Experian study, less than 25% of American households are debt-free. This figure may be small for a variety of reasons, particularly because of the high number of home mortgages and auto loans many Americans have.
According to a 2019 Experian study, men carry more debt than women across nearly all categories, including credit card debt — the study found that men have $125 more in credit card debt than women on average.
Top Foreign Holders of U.S. Debt
With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt.
Is it rare to have no debt?
Between mortgage loans, credit cards, student loans, and car loans, it's not uncommon for the typical American to have one or more types of debt. The ones who are living debt-free may seem like a rarity, but they aren't special or superhuman, nor are they necessarily wealthy.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill? Well, that's not impossible either, though it is considerably less fun.
Inflation—followed close behind by rising interest rates and a recent change in employment status—is dissuading them from putting money aside. “Inflation's once-in-a-generation surge has left its mark on American savings habits,” Hamrick wrote in the report.
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.
About 29% of respondents have between $501 and $5,000 in their savings accounts, while the remaining 21% of Americans have $5,001 or more. Few hold much cash in their checking accounts as well. Of those surveyed, 60% report having $500 or less in their checking accounts, while only about 12% have $2,001 or more.
Key Findings. On average, an individual needs $96,500 for sustainable comfort in a major U.S. city. This includes being able to pay off debt and invest for the future.
The median household income in the U.S. is just under $75,000, so it makes sense that the largest proportion of those surveyed (45%) said that it's possible to be financially stable by earning between $50,000 and $100,000 a year.
45% of young adults say they are completely financially independent from their parents. Among those in their early 30s, that share rises to 67%, compared with 44% of those ages 25 to 29 and 16% of those ages 18 to 24. 44% of young adults say they received financial help from their parents in the past year.
That said, the typical age of financial independence should be between 20-23 years old, according to a Bankrate survey.
Bankrate's latest survey results found 56% of U.S. adults lack the emergency funds to handle a $1,000 unexpected expense and one-third (35%) said they would have to borrow the money somehow to pay for it.
How many adults are not financially stable?
According to the survey, only 28% of Americans say they are completely financially secure, compared to 72% who say they are not.
Myth 1: Being debt-free means being rich.
A common misconception is equating a lack of debt with wealth. Having debt simply means that you owe money to creditors. Being debt-free often indicates sound financial management, not necessarily an overflowing bank account.
There were about 572 million credit card accounts in the U.S. as of 2022, and 84% of adults had at least one credit card in their wallet.
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.
White people, on average, are more likely to have mortgage debt than Black people, but Black people are more likely to have credit card debt (Dettling et al., 2017).
