Survey: Americans Are (Still) Struggling With Debt
- UpdatedAug 22, 2024
- A Freedom Debt Relief survey found that one in four Americans have more than $10,000 in credit card debt.
- About one-third said they'd have to use credit cards to cover a $2,000 emergency.
- And two-thirds said that if they received $5,000 they'd spend it to pay down debt.
While the United States is one of the richest countries in the world, debt continues to weigh us down. Credit cards, student loans, mortgages, car loans, personal loans, medical bills–according to our recent survey, most Americans have a combination of these types of debt. And despite their best intentions, many seem to be digging themselves deeper into the hole each year. So, why do we have a debt problem, and what can you do if you’re struggling with debt?
What Does “Struggling With Debt” Look Like?
According to our recent survey, 26% of people have more than $10,000 in credit card debt. To make things worse, 29% of those surveyed said that if they needed $2,000 for an emergency, they would reach for their credit cards. It’s no wonder why so many people are struggling with debt.
The problem often compounds, leading to stress and preventing people from getting ahead financially. It’s a problem that many Americans are aware of, and also actively trying to get out of. In fact, 62% of those surveyed said they would use a $5,000 windfall to pay off credit card debt. However, you don’t have to wait for that to happen to start improving your finances.
End Struggling With Debt
Here are 5 things you can do immediately to start getting your debt under control:
1. Stop using your credit cards
One of the reasons Americans are drowning in debt is that they’re not plugging the holes in the sinking boat. If you’re struggling with debt, the first step is to stop accumulating more of it. For example, if you continue to use your credit cards, you’ll only make the problem worse. Instead, switch to paying with cash or a debit card so you won’t rack up additional debt as you’re trying to pay off what you already owe.
2. Set a realistic budget
Next, take stock of all debts, expenses, and income. Be honest about your needs and evaluate where you can cut costs. Once you’ve prioritized your expenses, create a spending plan that you can stick to. Remember, saving is also an important part of improving your financial health, so make sure to work that into your budget as well. Focus on living within your means so that you won’t have to rely on credit cards.
3. Change your lifestyle
Paying off debt requires a high level of commitment and will often require some lifestyle changes. It’s easy to get discouraged at times, but if you remain dedicated to achieving your goal, there’s a high probability that you will succeed. Aside from slashing expenses, try to think of other ways you can free up cash. Perhaps you could sell items around the house and put the profits toward paying down debt.
4. Add a side gig
If you’ve already cut back on your expenses, it may be time to consider earning some extra money. Flexible side hustles can bring in more cash and help you get free from debt faster. Consider your skills, experience, and available time when looking for ways to boost your income. These days, there are tons of creative ways to supplement your take-home pay.
5. Understand your debt relief options
There are many ways to get out of debt, and the right solution for some may not be the right solution for you. Your best debt relief option depends on how much you’re struggling with debt, how quickly you want to get rid of debt, and how much you can afford to pay. From accelerating your debt repayment to debt consolidation, debt negotiation, or debt settlement, there are multiple ways to ease your debt burden. A little research can go a long way toward giving you peace of mind.
Still Struggling With Debt? Get Help Here
If you’re still struggling with debt and feel overwhelmed about where to start, there are experts who can point you in the right direction. Freedom Debt Relief is here to help you understand your options for dealing with your debt, including our debt relief program. Our Certified Debt Consultants can help you find a solution that will put you on the path to a better financial future. Find out if you qualify right now.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during July 2024. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In July 2024, people seeking debt relief had an average of 77% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 24% |
| Very high | 30% |
| High | 21% |
| Medium | 12% |
| Low | 11% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Student loan debt – average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average student debt for those with a balance was $46,980. The percentage of families with student debt was 22%. (Note: It used 2022 data).
Student loan debt among those seeking debt relief is prevalent. In July 2024, 29% of the debt relief seekers had student debt. The average student debt balance (for those with student debt) was $50,602.
Here is a quick look at the top five states by average student debt balance.
| State | Percent with student loans | Average Balance for those with student loans | Average monthly payment |
|---|---|---|---|
| Washington DC | 38 | $74,476 | $138 |
| South Dakota | 30 | $60,924 | $154 |
| Mississippi | 30 | $58,354 | $129 |
| Georgia | 33 | $57,459 | $139 |
| Maryland | 28 | $54,227 | $190 |
The statistics are based on all debt relief seekers with a student loan balance over $0.
Student debt is an important part of many households' financial picture. When you examine your finances, consider your total debt and your monthly payments.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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