What Percentage of America Is Debt Free? (2024)

Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more.

The exact definition of debt free can vary, though, depending on whom you ask. For example, some people don’t count mortgages because they are viewed as “good debt” by creditors, since they are secured by the property itself. It may be helpful to look at the percentage of people who hold different types of debt in order to get the full picture.

Type of Debt

Americans With This Type of Debt

Credit card balances


Debt secured by a primary residence (mortgages and related loans)


Vehicle loans


Education loans


Other installment loans


Debt secured by residential property that’s not a primary residence


Lines of credit not secured by residential property


Other debt


Source: Federal Reserve data

Americans owe a lot of debt in general – over $17 trillion. Because there are so many types of debt, and debt is usually necessary for big things like owning a home or going to college, very few people are totally debt free. However, having some form of debt isn’t always a bad thing. A mortgage allows you to own your own home long before you’d have the money to do so, for example. And having some sort of debt is actually good for building credit – as long as you make your monthly payments on time and don’t borrow more than is manageable, your credit score will benefit.

Still, you should absolutely try to minimize unnecessary debt. For example, while it’s great to have a credit card, it’s not ideal to carry a balance on one unless you have an introductory 0% APR, as interest is expensive. You should try to pay your balance in full each month. In addition, you should avoid predatory loan types like payday loans and auto title loans that are extremely expensive.

How to Become Debt Free

  1. Assess Your Debt: List all your debts, including interest rates and minimum payments. This will allow you to take stock of your situation and prepare you to get organized and create a debt payoff plan.
  2. Create a Budget: Outline your income and expenses to understand where your money is going. After determining how much of your income you need to put toward non-debt expenses, decide what portion of the rest you are willing to put toward paying off your debt. You should also cut out any unnecessary expenses and redirect that money toward your debt. Then, track how you use your money and stick to your goals. You can learn more about how to budget on WalletHub.
  3. Build an Emergency Fund: Ideally, you’ll want enough money in the fund to pay for 3 to 6 months of expenses. You don’t have to wait until the emergency fund is entirely built to start paying down your debt, but you should put some money toward it each month.
  4. Choose a Strategy: Focus on paying off high-interest debt first (avalanche method) or the smallest balances first (snowball method). The first strategy will get you out of debt more quickly, but the second one can help keep you motivated by allowing you to meet individual milestones faster. You can learn more about the best way to pay off debt on WalletHub.
  5. Increase Your Income: If possible, find additional income sources like a part-time job or investments.
  6. Use Windfalls Wisely: Put unexpected money like tax refunds or salary bonuses toward your debt.
  7. Avoid New Debt: Resist the temptation to take on additional debt while paying off current obligations. The exceptions to this are if you use a balance transfer credit card or debt consolidation loan to put your debts in one place and lower your interest rate. Still, stick to the budget that you made and don’t make frivolous purchases.
  8. Use the Island Approach: The Island Approach is when you use different credit cards for different types of transactions. It emphasizes keeping your everyday expenses separate from other types of balances like balance transfers and purchases that won’t be paid in full, so you can maximize the effectiveness of your payments and accrue as little interest as possible. Most importantly, you should strive to pay your everyday expenses in full each month.
  9. Seek Professional Help if Needed: Consult with a financial planner or debt counselor if you need assistance.
  10. Stay Committed: Understand it's a gradual process, and stay committed to your plan. Celebrate small victories along the way.
  11. Review Regularly: Regularly review your budget and debt payoff strategy, making adjustments as necessary.

By following these steps, you can work methodically toward becoming debt free. It's a challenging journey, but with discipline and determination, it's achievable. You can learn more about how to pay off debt on WalletHub. You can also take advantage of free tools such as WalletHub’s credit card payoff calculator and mortgage payoff calculator.

This answer was first published on 08/25/23. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

What Percentage of America Is Debt Free? (2024)


What Percentage of America Is Debt Free? ›

Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.

What percentage of the US is debt free? ›

What percentage of America is debt-free? According to that same Experian study, less than 25% of American households are debt-free. This figure may be small for a variety of reasons, particularly because of the high number of home mortgages and auto loans many Americans have.

What percentage of Americans are financially free? ›

SAN MATEO, Calif., Aug. 22, 2023 /PRNewswire/ -- Despite most Americans having modest expectations of what it means to attain financial freedom, just 1-in-10 (11%) report they are living their definition of financial freedom, according to a new survey by Achieve, the leader in digital personal finance.

What is the percent of Americans in debt? ›

Average debt levels in America, by generation

In 2024, the average debt crept up from $21,800 to $22,713, with 66% of respondents saying they hold at least some debt. Most of that debt stems from credit cards (28%) and auto loans (13%), roughly the same levels recorded by Northwestern Mutual in 2023.

How many people have no credit card debt? ›

Percentage of people who have more credit card debt than emergency savings, by gender and income
Year incomeCredit card debtNo credit card debt and no emergency savings
Less than $50,00042%18%
$100,000 or more21%1%
1 more row
Feb 22, 2024

What percentage of Americans are mortgage free? ›

A record share of U.S. homes are mortgage-free

Line chart showing how the share of mortgage-free homes increased from 34.3% in 2012 to 39.3% in 2022, an increase of five percentage points.

What percentage of US debt is owed to citizens? ›

The Federal Government Has Borrowed Trillions, But Who Owns All that Debt? At the end of 2022, the nation's gross debt had reached nearly $31.4 trillion. Of that amount, about $24.5 trillion, or 78 percent, was debt held by the public — representing cash borrowed from domestic and foreign investors.

How many Americans have nothing in savings? ›

The financial services company surveyed more than 1,000 Americans regarding their retirement savings. Twenty-eight percent of respondents said they have $0 set aside for their later years. Here's how many Americans have nothing saved for retirement, broken down by age bracket: 18 to 24: 28%

Do 30% of Americans have no savings? ›

If you've got nothing saved for retirement, you're not alone. Nearly 30% of Americans have $0 saved for retirement, per recent data from personal finance website GOBankingRates. Another 33% have less than $50,000 saved.

What percent of the US is financially stable? ›

At the end of 2022, 73 percent of adults were doing at least okay financially, meaning they reported either "doing okay" financially (39 percent) or "living comfortably" (34 percent).

At what age are people debt free? ›

A good goal is to be debt-free by retirement age, either 65 or earlier if you want. If you have other goals, such as taking a sabbatical or starting a business, you should make sure that your debt isn't going to hold you back.

Are 80% of Americans in debt? ›

Overall, 80 percent of Americans hold some form of debt, whether mortgages, car loans, unpaid credit card balances, medical and legal bills, student loans, or a combination of those.

Who owns over 70% of the U.S. debt? ›

Of the $33T of debt, roughly 78% is owned by the public (70% US vs 30% International). The major US public owners include the FED ($6T, but they are no longer buyers), mutual funds, banks, states, pension funds and insurance companies.

Is it rare to have no debt? ›

Between mortgage loans, credit cards, student loans, and car loans, it's not uncommon for the typical American to have one or more types of debt. The ones who are living debt-free may seem like a rarity, but they aren't special or superhuman, nor are they necessarily wealthy.

Are people struggling financially in 2024? ›

Feelings of financial insecurity among Americans have reached their highest point in at least a decade. A third of American adults in Northwestern Mutual's 2024 Planning & Progress survey said they don't feel financially secure. That's up from 27% in 2023 and the highest measure going back to 2012.

How many people have $50,000 in credit card debt? ›

Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?

What proportion of the US is in debt? ›

The United States' debt-to-GDP ratio at the close of fiscal year 2023 was 97 percent. While this figure is down slightly from 100 percent in 2020, a 74-year high, the nation's fiscal outlook is still on an unsustainable path. Debt held by the public is on track to exceed GDP in 2025 and climb to 116 percent in 2034.

What percentage of Americans have no savings? ›

Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That's especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.

Who owns most of America's debt? ›

The major international owners of US debt include Japan ($1.1T), China, UK, Belgium, Switzerland, Cayman Islands and smaller amounts from the rest of the world. After the recent weak treasury auction, US government officials warned that they are seeing waning demand from international buyers.

How many times has the US had no debt? ›

(In 1835, the $17.9 million budget surplus was greater than the total government expenses for that year.) By January of 1835, for the first and only time, all of the government's interest-bearing debt was paid off.


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