In the United States, it's almost impossible to avoid debt and most people burdened by it. For some people, their debt is tied up in earning college degrees, while others may have it invested in their home. Whatever the debt may be, many people struggle with it and hold a lot of it. However, what is the average American debt? The short answer is $38,000.
The average American mortgage debt
The largest source of debt for Americans is mortgages, which covers $9.4 Trillion of the $13 Trillion of total American debt. But this debt can looked at as an investment, since the price of a home normally appreciates or increases over time. Since mortgage debt can be considered an investment and is backed by the appreciating value of a property, it may not be best to consider it when calculating the average overall debt.
Other types of debt
Other types of assets connected to debt, like college degrees and (most) cars, lose value over time. These types of debt end up costing the holder more than the item is actually worth. In some cases, like payday loans or credit card debt, the interest rate can make it nearly impossible to pay off.
These other lines of credit make up the remaining $3.6 Trillion of debt in the United States. On top of that, 23% of people said that they don't carry any debt at all. This results in 77% of Americans being burdened with the $3.6 Trillion of debt. If you remove mortgages from the equation, the average American debt is $38,000.
Debt can be a good tool to finance some of the necessities, like education and a home. However, too much debt can be a bad thing. Interest can pile up and take away from your future earnings, leaving you with less spending power each month. Remember to only finance things that you really need; otherwise you can get stuck in the cycle of debt.
