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What Is The Average Credit Card Debt Per Age Group

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Average Credit Card Debt Statistics By Country

What is your debt age?

This is a breakdown of the average credit card debt 2020 statistics of the top 10 countries by Gross Domestic Product . Theoretically, one might expect the countries that have the lowest amount of credit card debt to be the top GDP country. However, that is not the case, as this list is ranked from 1-10 by GDP, but the average credit card debt by country does not line up with the GDP rankings.

Average Credit Card Debt Statistics

As of quarter 3 in 2020, the average credit card debt has decreased for the first time in several years. Time will tell the economic effects of the COVID-19 pandemic and whether credit card debt will continue to decrease or not. The average American debt per household is also continuing to climb due to the ever increasing out-of-pocket healthcare costs among other things.

Whatever the case may be, the average debt credit card users have is increasing. On average, an American has 2.7 credit cards.On this page, we will look at the average household debt by country. We will also zoom in to look at the debt average by state, gender, age, generation, income level, & race.

What Is A Credit Score

Before we study the average Canadian credit score by age, its good to get an understanding of how these scores fluctuate. Your three-digit credit score is essentially a way of summing up your actions as a credit user, similar to how a grade-point-average system works.

To build yourself a better mental picture, think of your credit products as your school classes. What happens when you do your homework on time and ace your tests? You get a better grade at the end of the semester. On the other hand, if you dont do your homework and dont study, you may see your grades getting lower. Next? All your grades get combined to form your GPA. The higher your GPA is, youre more likely to get into the program you want when you apply at universities and other schools.

Theres a similar occurrence when it comes to your credit score. If you make responsible credit-related transactions, like paying your bills on time and in full, no matter what the product, your score will rise. However, the more irresponsible actions you make, such as late, short, and missed payments, the further your score will drop. And, just like schools do with your GPA, lenders examine your credit score when you apply for their products. The higher your credit score is, the better your chances of approval will be and vice versa.

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Planning Ahead For Education

For many younger Canadians, one of the first major expenses for which they need to plan is post-secondary education, whether that means technical or vocational training, a community college program or a university degree. This section looks at how young Canadians are planning to pay for their educations, along with support from their parents.

Paying for post-secondary education

Overall, about 6% of Canadians are planning post-secondary education as their next major expenditure in the next 3 years, either for themselves or for their children. Moreover, almost one quarter of Canadians aged 18 to 24 cited education as the main major expenditure they were planningthe most common response for this age group.

The median estimated cost for this education is between $20,000 and $29,999, but there is considerable variation, likely due to differences in program and length of study. The average annual tuition cost for Canadian full-time students is $6,838 for undergraduate programs and $7,086 for graduate programs for the 2018/19 academic year . Almost half of those planning on post-secondary education, either for themselves or their children, anticipate using mostly savings to pay for their education, while 40% expect to borrow at least a portion and 12% do not yet have a plan for how they are going to pay for their education.

Figure 17: Distribution of Canadians estimated education costs among those planning post-secondary education within the next 3 years

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Age group
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What Is The Average American Credit Card Debt Per Household

Average Credit card Debt Statistics in 2020

The convenience and safety that credit cards offer make them one of the most preferred payment methods by consumers of all ages. Statistics show that there are around half a billion active credit card accounts today. The massive increase in account issuance is also the reason why 38% of all merchant transactions in 2020 consisted of credit card payments.

Unfortunately, credit card issuance doesnt come with debt management training. Too many cardholders spend their money carelessly. A CNBC report even states that the average working American carries around $6,100 in credit card debt. Whats worse is that a good percentage of these cardholders are likely behind on payment by at least a month or two.

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Choose A Repayment Method And Set A Goal

Whichever method you choose, the first step is going to be to take stock of everything you owe, how much you owe in total, and the interest rate. Then, you can start to prioritize what you owe.

Two popular strategies are the debt avalanche and the debt snowball. The debt snowball tackles the smallest debt first to build momentum, working through bigger debts next, while the debt avalanche focuses on paying down higher-interest debt first to decrease the amount you pay overall.

Iv Saving Toward Future Goals And Preparing For Unexpected Life Events And Expenses

Budgeting is not only useful in managing day-to-day finances and debtit can also help Canadians meet long-term financial goals, such as becoming financially prepared for the future. This can include planning for retirement, saving for education or saving to buy a home. It can also include shorter-term goals like making home repairs or improvements, buying a vehicle or taking a vacation. For many Canadians, planning for the future also means having an emergency fund in place in order to be prepared for unexpected life events and expenses.

Statistics Canada estimates that on average, Canadian households put aside savings of about $850 in 2018. It is important to keep in mind that savings patterns can vary considerably over a persons lifecycle as they increasingly concentrate on saving for retirement. For example, individuals in households where the primary earner is under 35 years old have average net savings of about $5,000 per year. These savings grow to an average of more than $10,000 annually for those aged 35 to 55 . In retirement, Canadians are more likely to be drawing down their pension assets and other retirement savings. In fact, seniors aged 65 or older withdrew an average of about $17,000 from these savings each year. It is important to note that some Canadians are not saving at all. This choice can be influenced by both expected and unexpected life events that cause individuals to incur debt or draw down previous savings to finance their living costs .

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The Average American Debt By Type Age And State

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  • The average American debt totals $52,940.
  • That includes mortgages, home equity, auto, student, and personal loans, plus credit card debt.
  • Debt peaks between ages 40 and 49, and the average amount varies widely across the country.

The average American has $52,940 worth of debt across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans.

Data from the Federal Reserve Bank of New York’s Household Debt and Credit report breaks down the average amount of debt Americans have by type, and by borrowers’ ages and location. The data was gathered through a random sample of about 5% of Americans with credit report information.

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Here’s what the average American owes.

The Average Debt For Those Under 35

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Every three years, the Federal Reserve conducts a Survey of Consumer Finances. In 2013, the survey found that the average debt for households that have debt and have a head of household aged less than 35 years old is $82,500. Not all householders in this age bracket have debt, which is why the Fed bases its average only on in-debt households. Mortgage debt on a primary residence in this age group averages $142,000.

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Average American Debt By Type Of Debt

Here’s a breakdown of the total amount, according to the Federal Reserve Bank of New York’s Household Debt and Credit report from the first quarter of 2021.

Debt type
Home equity lines of credit $1,210
Other debt $1,490

Mortgage debt is most Americans’ largest debt, exceeding other types by far. Student loans are the next biggest type of debt among those listed in the data.

S Of Financial Education And Financial Learning

Over the past 5 years, almost half of Canadians engaged in some type of financial education to strengthen their financial knowledge, most commonly by reading a book or other printed material , conducting online research , or pursuing financial education at work . Less commonly, adults took in-person courses at a school or through a not-for-profit or community organization .

There are considerable differences in the likelihood and the preferred methods of financial learning for different age groups. For example, more than half of Canadians aged 18 to 34 have taken steps to strengthen their financial knowledge, mainly through online study or at work or school . In contrast, only one third of Canadians aged 65 or older engaged in financial learning over the past 5 years . Seventeen percent of seniors did so by reading a book or other printed materials. Only 7% of persons in this age group participated in online financial learning. Again, this corresponds with the methods that seniors prefer for seeking advice and financial information .

Figure 27: Percentage of Canadians engaged in different types of financial learning

Type of financial learning
5 5

* Note that the categories “From the media” and “Other” are not included because there were not enough Canadians from each age group to analyze these data.

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Key Findings: Average Credit Card Debt By Group

Credit Karma members overall carry an average of $6,146 in credit card debt per person.
Across age groups, Baby Boomers have the highest average credit card debt per person, at $8,684, followed by Gen X . By comparison, millennials have an average of $5,026 and Gen Zers have a much lower average .
Average credit card debt among members is highest in Scottsdale at $8,696, more than twice the average credit card debt in Detroit, which has the lowest average credit card debt at $3,982.
Looking at credit profiles, members with TransUnion VantageScore 3.0 scores from 660 to 719 carry the highest average credit card debt per person, at $7,566 while those with the strongest credit scores carry almost a quarter less in average credit card debt .

Average Credit Card Debt By Age: Older Gen Xers

Average Credit Card Debt in America: February 2020 ...

$4,290.07

The average amount of credit card debt remains fairly consistent across Generation X, though the older Gen Xers do have a notable spike of nearly 25 percent more debt than the amount owed by their younger generational contemporaries.

Allianz’s study also found that their high average credit card debt is affecting the future of Gen X. Fifty percent of study respondents in this age bracket say that they won’t start saving for retirement until their credit card debt is a thing a past. So, it’s no coincidence that only 58 percent of them are confident that their income will last a lifetime — and more than 40 percent don’t know how they’re paying for retirement, according to a separate survey.

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How Do People Use Credit Cards

Out of 176 million credit card users, most cardholders carry a balance month to month. The Q2 2020 report by the American Bankers Association reveals that 44.6% of credit card users are revolvers, meaning they carry a balance to the next month at least once every quarter. Another 31.6% of credit card users are transactors, which means they don’t carry a balance and have no financing charges. The remaining 23.8% of credit card users show no activity.

Income Has Outpaced The Cost Of Living But By How Much

Over the past decade, the 10 years immediately following the Great Recession, the cost of living has increased 19% while median household income has soared 41%, according to government data. This suggests that some consumers came into 2020 with breathing room in their budgets, but the pandemics pervasive impact provides important context to understand these numbers.

The chart above shows a huge jump in household income by the end of 2019, but that increase is very likely overstated because of the challenges of collecting data during the pandemic. Data on average annual household income comes from the U.S. Census Bureau, which collected the 2019 numbers from surveys conducted in 2020. But surveys are being affected by a nonresponse bias more strongly associated with income than in the past, according to the Census Bureau. Simply put, changes to survey practices necessitated by the pandemic including the suspension of in-person interviews means that people who were struggling financially were more likely to be missed. As a result, 2019 income was overstated and poverty rates are understated.

The Census Bureau estimates that median household income in 2019 is actually 2.8% lower than reported, although the reported figure remains the official government number. Were using the reported number for year-over-year consistency.

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Average Mortgage And Heloc Debt In 2020

Figure
Average HELOC value, $49,929

Mortgage debt makes up the vast majority of American consumer debt at about 69%. That number has risen consistently since mid-2013. If we keep going at this rate, we’ll hit $10 trillion of mortgage debt in a year or so.

So how much mortgage debt does the average American have? In their 2020 State of Credit Report, Experian reports that the average mortgage debt among Americans is $215,655.

That’s slightly higher than the number in Experian’s 2019 report: $213,599.

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Average Household Debt By Age: WARNING!!!

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Average Credit Card Debt By Age: Young Gen Xers

$3,382.35

Compared to younger millennials, those between ages 35 and 44 are a lot more likely to have families, parents in retirement homes and mortgages. For Gen Xers on the younger side, that translates to credit card debt. And, unfortunately, it also translates to some bad financial habits.

In December 2017, Allianz Life Insurance Co. of North America released a study that revealed that non-mortgage debts — including credit card debt — for Gen Xers has increased 15 percent since 2014. Worse, Allianz found that a whopping 49 percent of Gen X card holders only pay a portion of their credit card debt each month, thus breaking the first rule of responsible credit card usage: Always pay your balance in full.

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Personal Loans In Hardship: 4377%

TransUnion says that a loan is in hardship if the borrower has a deferred payment, forbearance program, frozen account, or frozen past due payment.

In September 2020, 4.377% of unsecured personal loans were in hardship. In September 2019, 0.260% of personal loans had the same status. That’s an increase of 1,580%.

There’s no way to know for sure, but it seems very likely that the coronavirus pandemic had a hand in this increase.

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