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Consumer Debt Reaches $13 Trillion in Q4 2018

There was rarely a dull moment in the U.S. economy in 2018. As the economy remained generally healthy, Americans witnessed a historic 49-year-low unemployment rate, tax law changes and trade wars. The Federal Reserve, in an attempt to stave off inflation, raised interest rates not once, but three times.

At the same time, the housing market slowed, the stock market experienced historic volatility, and U.S. consumer confidence hit an 18-year high, only to plummet months later to see its biggest one-month drop in the past three years.

As Americans rode the economic highs and lows throughout the year, one thing held constant: Their use of credit remained strong.

Consumer Debt by the Numbers

Americans' credit spending was greater than ever in 2018, as debt levels reached record totals. Overall consumer debt reached $13.3 trillion in the last quarter of 2018, while the total amount of unused revolving limits hit $4.1 trillion. Record-setting numbers, based on Experian data from the fourth quarter of 2018, spanned several credit categories:

  • Credit card debt reached an all-time high of $834 billion.
  • Mortgage debt reached a new high of $9.4 trillion.
  • Personal loan debt totaled $291 billion and was the fastest-growing type of consumer debt in the past year.
  • Student loan debt reached a record high of $1.37 trillion.
  • Auto loan balances hit $1.27 trillion, an all-time high, coupled with a new record for the average monthly auto payment, at $523.

Looking at the different ways U.S. consumers used credit products, Experian data shows:

  • 60% had a credit card
  • 40% had a retail store credit card
  • 32% had an auto loan
  • 24% had a mortgage
  • 14% had a student loan
  • 11% had a personal loan

While it's still early in 2019 to predict what the year will bring, there are clues from the consumer debt picture painted in the last quarter of 2018. Let's take a closer look at U.S. consumer debt across different products.

Credit Card Debt

On average, credit card debt starts to decrease when consumers are in their fifties, as Experian data shows for 2018 and 2017. That's good news for the oldest Generation X members, who are now in their fifties; however, the group as a whole carried the most credit card debt this past year, with their average balances growing 3%. Generation Z saw the biggest year-over-year jump, as their balances grew 12%.

Looking at metropolitan markets, 37 areas saw their average credit card balances shrink in 2018. Meanwhile, only one state could say the same. Here is a look at credit card debt across the country.

Alaska Ranks Highest in Average Credit Card Balances

The state of Alaska had the highest average credit card balance in 2018, at $8,174. This marked a slight increase from 2017, when the state also ranked at the top for highest average balance. New Jersey had the second-highest average balance of $7,511, followed by Connecticut with $7,490. The District of Columbia and Virginia rounded out the top five with average balances of $7,457 and $7,351, respectively. The District of Columbia had the biggest year-over-year increase of credit card balances, with a bump of 3.6%.

Looking at metropolitan markets, the Bridgeport-Stamford-Norwalk, Connecticut, metropolitan statistical area (MSA) had the highest average credit card balance of $9,070 among MSA markets.

Iowa Has Lowest Average Credit Card Balance

Iowa boasted the lowest average credit card balance of $5,065 among all states in 2018. It was followed by Wisconsin at $5,255 and Mississippi at $5,398. South Dakota had the fourth-lowest balance at $5,459, followed by Kentucky at $5,462. Maine was the only state to see its credit card balance decrease, dropping by .4%, or $20, just enough for lunch. The Dubuque, Iowa, market had the smallest average credit card balance of $4,201 among MSA markets in 2018. Bangor, Maine, saw the biggest year-over-year decrease in credit card debt as its average balance shrank 2.7%.

Home Sales Stall in 2018

Rising home prices and interest rates combined to make home-buying affordability a challenge in 2018. Existing home sales fell 6.4% in December 2018 to 4.99 million, and compared with 2017, overall 2018 sales were down 10.3%, according to data from the National Association of Realtors (NAR). Existing homes account for around 90% of all home sales, while new home construction accounts for roughly 10%.

Compounding that was a 12% decline in sales of new single‐family homes from October 2017 to October 2018, according to the U.S. Census Bureau and the Department of Housing and Urban Development. Declines in home purchases were not an indication of more mortgage defaults, however. In fact, foreclosure volume dropped to a 13-year low in 2018 and was down 78% from its high mark in 2010, per ATTOM's 2018 foreclosure report.

Here is a further look at mortgage debt across the United States.

District of Columbia and Silicon Valley Rank Highest in Average Mortgage Balances

The District of Columbia, grouped with states for statistical purposes, had the highest average mortgage balance, $418,755, among all states in the fourth quarter of 2018—an increase of 3% from 2017. California ranked second with a $361,066 average balance, followed by Hawaii at $341,321, Washington state at $259,878 and Colorado at $256,120. Colorado and Texas tied at 3.6% for the largest increases in average mortgage balances from 2017.

California markets accounted for eight of the top 10 MSA markets with the highest average mortgage balances in 2018. The San Jose-Sunnyvale-Santa Clara, California, MSA ranked first at $513,174.

West Virginia and Danville, Illinois, See Lowest Average Mortgage Balances

West Virginia had the lowest average mortgage balance of $110,188 among all states in the fourth quarter of 2018. Indiana was next at $119,544, followed by Mississippi at $120,585, Ohio at $122,221 and Kentucky at $124,853. Vermont saw the smallest increase in average mortgage debt from 2017 at 0.4%. Among MSA markets, Johnstown, PA, boasted the lowest average mortgage balance at $70,577—and it saw the biggest decrease in average mortgage balance: 1.7% since 2017. All told, 19 markets saw their mortgage balances decrease in 2018.

Auto Loans Increase Most Among Younger Generations

U.S. auto sales are on track to exceed 17 million vehicles for the fourth consecutive year, according to data from Experian Automotive. Meanwhile, total auto loan balances reached $1.27 trillion in 2018, an all-time high.

While auto loan totals set a record, average balances stayed relatively flat in 2018 compared with 2017. The average auto loan balance came out to $18,956, representing a 1% increase. Auto loan balances among Generation Z increased the most, at 12%, with millennials right behind them at 8%. Overall the average new-car monthly payment stands at $530, with the average used-car loan payment at $381—both record highs, according to data from Experian Automotive. Here is a look at auto loan debt across the country.

Wyoming and Midland, Texas, Have Highest Average Auto Loan Balances

Wyoming had the highest average auto loan balance among the states at $24,252, as well as the largest year-over-year increase at 2.2%. Texas ranked second with an average auto loan balance of $24,112, followed by New Mexico at $23,376 and Louisiana at $22,856. Oklahoma came in fifth at $22,553. Forty-nine states saw an increase in their average auto loan balances in the fourth quarter of 2018.

Among MSA markets, Midland, Texas, had the highest average auto loan balance of $33,420 in 2018. Texas markets accounted for nine of the top 10 markets in average auto loan balances. Carson City, NV, claimed the largest year-over-year increase in average auto loan balances at 7.6%.

Michigan and Detroit Carry Lowest Average Auto Loan Balances

It may not be surprising that Michigan, home of Motor City, had the lowest average auto loan balance of $14,523 among all states in the fourth quarter of 2018. It was closely followed by Rhode Island, with an average balance of $14,792, Massachusetts at $15,620, and Connecticut and New Jersey at $15,764 and $15,838, respectively. The District of Columbia and New Jersey saw auto loan balances decrease—the only two among state statistics.

The Detroit-Warren-Livonia, Michigan, MSA had the lowest average auto loan balance of $13,527. Michigan markets accounted for five of the 10 markets with lowest auto loan balances. Overall, 45 markets saw a decrease in their average balances, with Springfield< IL, experiencing the biggest drop at 2.1%.

Personal Loans Make Up Fastest-Growing Loan Debt

Existing personal loan debt hit $291 billion in the fourth quarter of 2018, an 11.4% increase over the same quarter in 2017. That growth rate is bigger than auto loans, credit cards, mortgages and student loan debt, making personal loans the fastest-growing debt category in the past year, according to Experian data. Here is a look at personal loan debt around the country.

Washington State Tops Average Personal Loan Balances

Among states, Washington had the highest average personal loan balance of $27,729 in the fourth quarter of 2018. South Dakota ranked second with an average balance of $26,597, followed by Oregon at $26,527, North Dakota at $26,281 and Montana at $24,725. Among MSAs, the San Luis Obispo-Paso Robles, California, market had the highest average personal loan balance of $46,164 in 2018.

Hawaii Claims Lowest Average Personal Loan Balance

Hawaii had the lowest average personal loan balance among states of $12,638 in the fourth quarter of 2018. The District of Columbia ranked second with an average balance of $13,261, followed by Kentucky at $13,817, Illinois at $13,895 and Georgia at $13,896. Among MSAs, the Brownsville-Harlingen, Texas, market had the lowest personal loan balance of $7,582 in 2018.

How to Reduce Debt

While 2018 set new debt levels across the credit spectrum, you can make 2019 the year that your own debt doesn't grow to unmanageable limits. Knowing what you owe is an easy way to start taking control of your debt. Here are four other important strategies:

  • Pay bills on time. This is the simplest step you can take to manage your credit while also helping your credit scores. Establishing a positive payment history is the single most important factor in most credit scoring models, accounting for 35% of your FICO® Score* .
  • Pay off credit cards. With average credit card interest rates at a record high, you should attempt to keep your credit card debt in check by paying off balances as soon as possible. Start looking at credit card debt as a short-term loan that you want to pay off quickly or at least keep to a minimum. You might want to try getting a lower interest rate on your cards by negotiating with the card issuer to see what is possible. If you are receiving a tax refund this year, consider using that money to help pay down your debt. You should also strive for a lower credit utilization ratio to ensure that you aren't using more than 30% of your available credit at any given time.
  • Change your spending habits. If you tend to spend beyond your means, then you may not be able to whittle your debt as fast as you'd like. Changing your habits, even a little bit, can make a huge difference. Make a budget, taking into account what you can truly afford each month, and stick to it. Try to start saving even just a little more each month so you can start to pay down your debts faster.
  • Apply for credit only when you need it. Avoid the temptation to get a lot of new credit cards. Opening up a bunch of accounts can make you appear risky to lenders.

Improve Your Credit Standing

While the past year saw a number of firsts for debt levels, it also brought about new innovations to credit reporting and scoring. One of the more significant changes came with the launch of Experian Boost , which allows you to add your utility and telecom bill payment history to your credit report, creating more positive payment history and potentially improving your credit score. This can create an opportunity for you to improve your credit profile and give you more control in showing your good credit standing.


Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.

This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

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