A Lifetime of Debt: The Average American’s Financial Journey

A Lifetime of Debt: The Average American’s Financial Journey

The first payment-based debt for the average American is incurred while still in high school. Many more debt obligations can be expected after that time.

The Department Store Card

Interest rates on department store cards can be as high as 33 percent. Over 173 million Americans own at least one credit card. Target is in the top 10 issuers of credit cards.

The First Credit Card

The average rate for standard bank credit cards is around 19 percent. Only 2 percent of undergrads have no credit history. The average undergrad has $3,200 in credit card debt. Eighty-four percent of college students have credit cards. Half of all college graduates have four or more credit cards. The average graduate student has $8,600 owing on his or her credit cards.

The Undergraduate Student Loan

The average student amasses over $20,000 in student debt toward his or her first degree.

The Graduate Student Loan

On average, master’s degree students take on an additional $17,000 in student loans. Doctoral students amass another $29,000. Med School graduates leave school with an average of $113K in debt.

The Next Credit Card

Three-fourths of American households have multiple credit cards.

The Auto Loan

The average auto loan is $30,738, a 40 percent rise in the last 10 years. Most auto loans are over six years in length. This is double the loan term of a typical auto loan 25 years ago. The average auto loan interest rate varies between 7 and 9 percent.

The Mortgage

The average home mortgage costs about $240,000. After 30 years of making payments, a homeowner with a $240,000 mortgage loan will have paid over $580,000 on his or her house.

The Second or Third Auto Loan

Two-thirds of all American households own two or more automobiles. Most Americans use loans to finance every vehicle they drive.

More Credit Cards

By age 60, the average American has five or more credit cards. The median credit limit on family credit cards in America is $18,000. The average balance per household in America with credit card debt is $10,637.

The Refinance

Refinancing a mortgage is often an attempt to consolidate overwhelming debt from a variety of sources. On average, about half of refinances result in a higher overall loan amount. The average American has a total of 13 credit obligations right now. Over a lifetime, the average American will pay over $600,000 in interest.