The financial landscape for Americans has undergone significant changes since the onset of the pandemic. In a surprising turn of events, data collected earlier this year indicates that Americans have managed to reduce their personal debt compared to pre-pandemic levels. According to research conducted by Northwestern Mutual, the average adult owes just under $22,000, reflecting a substantial decrease from the $29,800 recorded in 2019. In this blog post, we’ll delve into the details of this research and explore the dynamics of personal debt in the post-pandemic era.

How Much Debt the Average American Has in 2023

A Shift in Debt Dynamics

The study, conducted in partnership with the Harris Poll, interviewed over 2,700 U.S. adults online between mid-February and early March. One of the most notable findings was the consistent reduction in average personal debt among U.S. adults, excluding mortgages, over the past four years. While persistently high inflation has been a concern, the average personal debt in 2023 stands at $21,800, marking an impressive $8,000 decrease from the figures reported in 2019.

a table comparing the average personal debt in the United States for the years 2019 and 2023 based on the information provided:

YearAverage Personal Debt
Average Personal Debt

This table presents a straightforward comparison between the average personal debt figures in the two specified years. It showcases the decrease in average debt over the four-year period, highlighting the positive trend in reducing personal debt burdens.

Interestingly, the data reveals a divergence in Americans’ experiences with debt. While more than a third of respondents reported carrying their highest level of debt ever, an even larger share indicated the opposite. This nuanced picture demonstrates the complex relationship Americans have with debt during these times of economic uncertainty.

Generational Variations

The study highlights generational variations in debt experiences. Younger generations, such as Gen Z and millennials, are grappling with student loan debt as a major source of financial burden. In fact, 17% of Gen Z participants and 10% of millennials identified personal education loans as their top source of debt. This underscores the ongoing challenges faced by young individuals in pursuing higher education and managing associated debts.

Debt Repayment Strategies

While the report didn’t delve into specific debt repayment strategies, the data reveals a promising trend in the reduction of debt. Between 2019 and 2021, the average debt per individual saw a substantial drop of $6,475. This decline outpaced the reduction of $1,525 observed between 2021 and the current year. This suggests that during the initial pandemic years, factors like reduced spending, remote work arrangements, and the allocation of stimulus checks towards debt repayment contributed to improved financial situations for many Americans.

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Main Sources of Debt: Deciphering Americans’ Financial Burdens

In the ever-evolving financial landscape of the United States, personal debt has become a prominent facet of many Americans’ lives. From credit card balances to education loans, the sources of debt vary widely, reflecting the diverse challenges individuals face in managing their financial obligations. Let’s explore the main sources of debt as highlighted by recent research, shedding light on the dynamics that shape Americans’ financial burdens.

Main Sources of Personal DebtPercentage of Respondents
Credit Cards28%
Car Loans12%
Medical Debt7%
Home Equity Loans / Lines of Credit6%
Personal Education Loans5%
Educational Expenses for Family3%
Main Sources of Personal Debt Americans

1. Credit Cards (28%)

Credit cards have emerged as a leading source of personal debt among Americans. With their ease of use and accessibility, credit cards can quickly accumulate balances, especially when accompanied by high-interest rates. The allure of immediate purchases combined with deferred payment often leads individuals to carry balances, contributing to the significant portion of debt attributed to credit cards.

2. Car Loans (12%)

Owning a vehicle is a necessity for many Americans, and car loans provide a means to acquire one. However, these loans come with monthly payments that can add up, especially when combined with interest rates. As a result, car loans constitute a substantial portion of personal debt, impacting individuals’ financial stability.

3. Medical Debt (7%)

Despite efforts to improve healthcare accessibility, medical expenses can still create financial strain for many Americans. Unexpected medical procedures, prescription costs, and insurance coverage gaps can lead to accumulated medical debt. The burden of medical expenses can be especially challenging, as they often arise unexpectedly and require prompt attention.

4. Home Equity Loans / Lines of Credit (6%)

Homeownership is a cornerstone of the American dream, and many individuals tap into their home equity to address financial needs. Home equity loans and lines of credit allow homeowners to borrow against the value of their property. While these options can provide access to funds, they also introduce the risk of increased debt if not managed carefully.

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5. Personal Education Loans (5%)

Education is an investment in one’s future, but it often comes with a hefty price tag. As the cost of higher education continues to rise, personal education loans have become a significant source of debt, particularly for younger generations. Student loans can have long-lasting implications on individuals’ financial well-being, impacting their ability to save and invest.

6. Educational Expenses for Children or Family Members (3%)

Supporting the educational aspirations of family members, such as children or relatives, is a commendable goal. However, educational expenses can accumulate over time, especially as the cost of tuition and related expenses increases. Balancing the desire to provide education with financial responsibilities can be a delicate task.

Conclusion: Navigating the Path Forward

The sources of personal debt in the United States reflect a complex interplay of financial choices, economic circumstances, and societal pressures. While credit cards and car loans dominate the list, the broader context reveals the challenges Americans face in managing their financial obligations. As individuals strive to reduce debt and achieve financial stability, understanding these sources of debt can empower informed decision-making and pave the way for a more secure financial future. Whether it’s through prudent credit card usage, strategic loan management, or thoughtful education financing, taking charge of personal debt is a crucial step toward achieving lasting financial well-being.

Challenges Ahead

Despite the positive strides in reducing personal debt, challenges remain on the horizon. The New York Federal Reserve’s data indicates that U.S. household debt continued to grow, reaching $17.06 trillion in the last quarter. Rising credit card debt and auto loans are major contributors to this trend. Skyrocketing credit card APRs, surpassing 20%, coupled with inflation and higher interest rates, have led to an increase in auto loan balances as well.

Furthermore, the Central Bank’s rate hikes have made debt repayment more expensive, posing challenges for those aiming to reduce their financial obligations. As a result, individuals are encouraged to remain vigilant about their spending habits and financial planning to maintain the positive trajectory in debt reduction.


The post-pandemic financial landscape in the United States presents a mixed picture of progress and challenges. The Northwestern Mutual study indicates that Americans have managed to reduce their personal debt, even in the face of economic uncertainties and inflation. However, the data also highlights the uneven distribution of debt reduction efforts, with varying experiences across different generations. As Americans navigate this complex financial landscape, it’s crucial to adopt prudent financial practices, remain vigilant about debt repayment, and make informed decisions to secure a stable financial future.

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