The average American holds four credit cards, which isn’t surprising because credit cards are a handy way to finance purchases big and small—from groceries to big-ticket gadgets. However, far too often, Americans can’t afford their balances, miss payments, or get hit with interest charges. This results in these eight surprising average credit card debt statistics in the United States, including $6,194 of credit card-related debt per cardholder and $1.09 trillion of credit card debt.
1. 55% of Americans With Credit Cards Have Debt
Approximately 55 percent of Americans with credit cards have debt. This means that credit card debt among Americans seems to be common. The average credit card debt for each American that has a card was $6,194 in 2019, according to Experian. That’s $154 more credit card debt on average when compared to the second quarter (Q2) of 2018.
However, what’s even more daunting is the amount of credit card debt we see on average for each household. As of the end of 2019, on average, each household with a credit card had $8,461 in credit card debt. We found this number by dividing the total credit card debt in the US by the total number of American households as reported by the US Census Bureau.
By avoiding credit card debt and paying your balances on time, you can improve your credit score.
2. Total Credit Card Debt In the US Is $1.09 Trillion
According to the Federal Reserve, credit card debt among Americans is growing. Although revolving credit debt decreased at an annual rate of 0.5% in July 2020, credit card debt has steadily increased over time. The total credit card debt in the US has increased from $1.05 trillion in 2018 to $1.09 trillion in 2019. That’s an overall increase of $40 billion.
3. Generation X Has More Credit Card Debt Than Other Age Groups
While some say age is just a number, credit card debt statistics may disagree. Generation X, Americans between the ages of 45 and 54 have an average credit card debt of $7,100, according to the Federal Reserve. That’s $3,400 more in credit card debt than the age group with the least amount of debt—Americans younger than 35 years old (Generation X or millennials).
Although there are no definitive credit card debt statistics that tell us how much debt you’ll have by a specific age, we can see a trend when we look at the numbers. The average credit card debt among Americans peaks at ages between 45 and 54. What does this tell us? Americans who are younger than 45 or older than 55 on average have less debt than people between the ages of 45 and 54.
4. Americans Who Make Between $90,000 and $100,000 per Year Have More Credit Card Debt
Higher annual incomes often go hand in hand with more credit card debt, according to credit card debt statistics. Federal Reserve data shows us that Americans who bring in $90,000 to $100,000 per year have an average of $12,500 in credit card debt. This is $10,300 more than the lowest income bracket, which only averages $2,200 in debt.
Although annual incomes between $90,000 and $100,000 boast the most credit card debt, other income brackets experience a higher percentage of debt to income. For example, the debt-to-income (DTI) ratio for people making between $20,000 and $39,999 ranges from 10.5% to 19%. The top of the range, 19%, is roughly 5% higher than that of people who make $90,000 per year, which is a DTI ratio of 13%.
DTI ratio: A measurement of all your monthly debt payments divided by your monthly income. Lenders and banks use this figure to determine if you’ll be able to meet the payments of a new debt obligation like a credit card.
If your income is increasing, it’s best to proceed with caution. Earning more money often results in the urge to spend more money. If this is the case for you, avoid becoming greedy with your credit cards and only make purchases you know you can afford to repay. Otherwise, your credit card debt may spiral out of control, which can hurt your personal or business credit scores.
5. The Highest Average Credit Card Debt Among States Is $8,026
Average credit card debt statistics vary from state to state. However, the average debt in every state saw an increase from 2018 to 2019. Maine’s average credit card debt increased by 5.8%, which is the largest increase among states, while Arkansas and Wyoming had the smallest average credit debt increase at 0.5%.
Alaska has the highest average credit card debt among states at $8,026 per household. New Jersey has the second most credit card debt at $7,084, while Connecticut follows right behind with $7,082. Iowa experienced the least amount of average credit card debt in Q2 2019 coming in at $4,744.
6. Credit Card Delinquency Rates Reached 2.62% in 2019
Americans have managed their debt better in recent years, which is proven through lower delinquency rates. Current delinquency rates are far from what Americans were experiencing when the Great Recession ended in 2009 and rates were at 6.77%. Luckily, rates have mostly been on a downward trend since then.
Delinquency rate: Refers to the percentage of credit cards or other financial products like loans or mortgages that have delinquent payments. Your payments are deemed delinquent when you miss your payment due date.
In 2019, credit card delinquency rates were recorded at 2.62%. This is less than half a percentage point higher than the lowest rate recorded in the last 10 years: 2.12% in 2015.
7. Americans Have a Total of 486 Million Credit Cards
Credit cards are popular among Americans. Americans have a total of 486 million credit cards as of Q2 2019, according to Experian. This includes 20.8 million new credit card accounts that were opened in Q2 2019 alone, a 17% increase in new accounts when compared to Q2 2018. Not only that, but Americans, on average, carry four credit cards.
8. The Total Consumer Debt in the US Is $13.95 Trillion
While Americans’ average credit card debt statistics seem outrageous, they also owe tons of nonrevolving credit debt. This includes other loans not factored in revolving credit, such as loans for motor vehicles, mobile homes, education, boats, trailers, or vacations. The total nonrevolving credit debt in the US is $3.09 trillion as of 2019. This is $2 trillion more than the country’s credit card debt, which was $1.09 trillion as of 2019.
However, the $4.18 trillion of consumer credit debt (nonrevolving debt plus credit card debt or revolving debt) doesn’t include home mortgages. Once you factor that figure in, the total consumer debt—credit cards, auto loans, student loans, and mortgages—is $14.15 trillion (2019).
How to Get Out of Credit Card Debt
If you have a habit of paying your credit card late or your debt is spiraling out of control for other reasons, use these tips to get out of credit card debt fast:
- Use a balance transfer offer: Some cards offer introductory 0% annual percentage rate (APR) periods on balance transfers. While this doesn’t absolve you from balance transfer fees, which are typically up to 5% of your transfer amount, you’ll incur no interest for an extended time. Introductory periods typically last up to 21 months for personal cards and 15 billing cycles for business credit cards.
- Pay more than your minimum payment: Paying only your minimum payment is not going to let you get out of debt. Instead, aim to pay more than your minimum payment every month. If you have the funds, consider paying your bill down multiple times per month to speed up the process.
- Consider a planned payment plan: Choose either the avalanche or snowball method when paying down your debt. In the debt avalanche method, you pay down the card with the highest interest rate first. Meanwhile, with the debt snowball method, you focus on the smallest debt first, then move up to your next card. The avalanche method typically saves you more money over time as it helps you get rid of big interest charges.
Plain and simple: Credit card debt is not a place where you want to be. However, it’s common among cardholders in the US. Before opening a card and using it for your everyday expenses, understand the repercussions that can come from irresponsible use so you can avoid mistakes that may put you in the realm of some of these credit card debt statistics.