Here's the Typical American's Debt Load

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We've known for a while that America is awash in debt. Whether it's opinion pieces about the high cost of college (and related debt) or housing prices and mortgage debt, the internet is littered with discussions about what debt is doing to Americans' finances.

Thanks to a study by NerdWallet, we have some precise numbers on credit card debt and overall household debt. According to NerdWallet, the average American household carrying credit card debt owes $15,675.

In total, American households with debt owe $132,158 on average -- for a total nationwide cost of $12.29trillion.

Not all debt is bad

About two-thirds of that $12.29 trillion in debt is mortgage debt, or debt people take out when purchasing a house. Given that home equity (the value in a home that people accrue as they pay off their mortgages) makes up the vast majority of American wealth, mortgage loans taken out at a low interest rate can be a very good way to grow your assets.

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Another roughly $1.26 trillion (or around 10% of the total debt) is student loan debt -- much of it used to finance education at a four-year college. Let me be clear: The student debt load is an enormous problem. According to a recent study by the Center for Retirement Research, it may impact retirement savings rates. Nonetheless, the simple fact of the matter is that workers with college degrees earn significantly more than folks without those degrees. In fact, according to Census data, college-educated workers at the 50thpercentile earn over $20,000 more annually than those with only a high-school degree. While the average American household with student loan debt owes roughly $48,986, it's pretty clear that the benefits of a college degree generally outweigh the costs.

Mortgage and student loan debt aren't inherently bad, but if the loans were taken out at high interest rates, they could be costing you a lot of extra money. Fortunately, we have some tips on how to refinanceto take advantage of the current historically low interest rates.

This debt is almost always bad

Credit card debt is a different ballgame altogether. It's almost inevitably high-interest debt (18% annual interest rate is not uncommon) -- usually much higher than a mortgage (current rates around 3.6% annually) or student loan debt (rates are usually in the low-to-mid single digits, although they can top out around 12%). Credit card debt is expensive to maintain -- NerdWallet estimates that the average annual cost per household on the $15,310 credit card debt is $2,630.

That's a lot of money being poured down the tubes.

The underlying problem is people not paying off their credit cards. The American Bankers' Association estimates that 42.1% of credit cards are held by so-called "Revolvers" -- folks who don't pay off their credit cards in full each month -- while only 29.7% are held by by "Transactors," or those who pay off their balance every month.

Wipe out the credit card first

If you have several different types of debt (mortgage, auto, student loan, credit card, etc.), your best bet is usually to go after your highest-interest debt first. That's usually credit card debt, as credit cards tend to charge higher interest than other loans. Fortunately, NerdWallet's study noted that, among households with debt, credit card debt, at $15,310, was usually the smallest of the loan types the household had taken out.

That means it should be the easiest to wipe out, as well as the most important given its high interest rate (and therefore disproportionate cost to your household). To pay off your credit card debt faster, your best option is to reduce expenses and apply the savings toward your balance.

One way to potentially juice up this strategy is to do a balance transfer onto another credit card. This is not for the faint of heart, but many credit cards will offer you an introductory period of no interest (usually six months or so) for a balance transfer. During that period, you can pay down your balance at a faster rate by applying the amount you were paying on interest toward it.

Let's look at an example. Let's say you have around the average debt balance on your credit cards -- $15,000 -- and you're paying an 18% interest rate on it. You're paying $500 a month toward the balance and interest, which puts you on track to pay off your credit card in 41 a total cost of $20,500 ($5,500 interest, $15,000 principal). If you were to do a balance transfer to a credit card with a 0% introductory APR for six months, and kept paying $500 a month toward your total, you'd hack $3,000 (or 20%) off of your loan. You'd reduce your payoff time to 36 months, including the six months you were paying no interest, and your total cost to $18,000, thereby saving $2,500 in interest.

If you bumped your credit card payback to $750 per month permanently by using some of our budgeting tips, you'd pay off $4,500 of your loan before interest started up again -- and eliminate your credit card debt after a total of 22 months, at a total cost of $16,500 ($1,500 interest, $15,000 principal).

Don't be typical!

Too many people are carrying too much of a balance on their credit cards. Breaking free of the cycle of debt is a huge opportunity to get ahead and live your financial dreams. Take the first step today by committing to paying off your credit cards.

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