The Federal Reserve Bank of New York’s Center for Microeconomic Data shared some less-than-stellar news when it comes to the amount of debt American households owe. According to their Quarterly Report on Household Debt and Credit, household debt hit an all-time high of $13.15 trillion in the fourth quarter of 2017, an increase of $193 billion over the previous quarter and $572 billion over the previous year. That $13.15 trillion is also $473 billion higher than the previous peak in the third quarter of 2008.

To put that in perspective, $13.15 trillion divided evenly amongst each of America’s approximately 126.22 million households would mean $104,183 worth of debt each.

Credit Card Debt Shows Greatest Percentage Increase

Mortgage debt increased the most of all categories in total dollar amount; it’s up $139 billion (1.6%) over the prior quarter and $402 billion (4.7%) over the prior year. However, credit card debt climbed by the largest percentage amount, increasing $26 billion (3.2%) over the prior quarter and $55 billion (7.1%) over the prior year.

Large increases were also seen for student loan debt, which increased $21 billion (1.5%) over the prior quarter and $68 billion (5.2%) over the prior year. Auto loan debt increased $8 billion (0.7%) over the prior quarter and $64 billion (5.5%) over the prior year.

Interestingly, home equity line of credit debt actually decreased by $4 billion (0.9%) over the prior quarter and by $29 billion (6.1%) over the prior year.

What Americans Can Do to Decrease Their Debt

There are plenty of ways Americans can start decreasing their debt loads and, while the recommendations for how to pay down the different types of debt may vary, the overarching theme to reducing a household’s debt load is simple: In order to reduce debt levels, Americans can apply extra principal payments to most types of debt to speed up the repayment process. If extra principal payments aren’t an option, here are other ways you could potentially decrease their debt loads, based on the type of debt you have.

• If a family can’t make extra payments toward paying down their mortgage but wants the debt gone, they could decide to sell their home, pay off the debt and rent instead. According to ATTOM Data, 64% of the population lives in a market where it’s cheaper to rent than buy. Renting isn’t for everyone, though, but homeowners can alternatively try downsizing to a smaller, less expensive home.
• Similarly, a person could easily reduce their auto loan debt by selling their current car and buying a less expensive vehicle in its place. Unfortunately, people upside down on their auto loans could find this difficult if they don’t have the cash to pay the difference between the value of the car and the amount owed.
• Credit card debt can be repaid faster when the interest rate is lowered, too. Americans can call their credit card companies to ask for a reduction in their interest rates. While asking for a rate reduction won’t always be successful, it’s a quick and easy question that could have an enormous benefit.

Americans can also pay off most types of loans faster by refinancing their debt. Refinancing to a shorter term loan is an easy way to accomplish the goal of paying off debt faster when it comes to mortgages, auto loans and student loan debt, but it usually results in higher monthly payments that may not be affordable in every situation.

Reducing student loan debt, for example, is often a more challenging proposition. Since there is no underlying asset to sell, students typically focus on refinancing their debt at a lower interest rate.

Since personal loans generally have reduced rates, this can help to offset the higher expected monthly payments that come with shorter loan terms. The combination of a set repayment term, often one to seven years, with a potentially lower interest rate could allow Americans to pay off their student loans, as well as credit card and other debts, faster.

​Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.