Quick Key Facts About Credit Card Debt in the US
|More than 191 million, or 70% of Americans, have credit cards.
|Overall, the national average card debt among cardholders with unpaid balances was $6,569 by the 3rd quarter of 2021
|Credit card debt is the highest interest rate debt that people can carry.
|The average American consumer has three credit cards.
|More than half of credit cardholders have increased their credit card balance because of the COVID-19 pandemic.
|45% of U.S. credit cardholders pay their credit card balance in full each month, while 27% regularly carry a balance.
|Bank of America, Chase, and Capital One are the top 3 credit card issuing banks.
|Visa and Mastercard are the top major credit card networks with 52% and 22% market share, respectively.
Average Credit Card Debt in America (From 2010 – 2021)
The Average Credit Card Debt has been a roller coaster ride in the past decade in the United States. In 2010, the U.S. Census Bureau reported that U.S. citizens had over $886 billion in credit card debt and the average credit card debt per cardholder was $5,239. The Credit Card Charge Off Rate was 9.35% , and the Credit Card Delinquency Rate was 4.9%.
- As of 3Q 2021, Americans currently owe $804 Billion in credit card debt, and the average credit card debt is $5,525. The Credit Card Charge Rate is, and the Credit Card Delinquency rate is 1.7%
- According to the Federal Reserve Bank, 40% of American families spend more than they earn.
- Approximately half of all credit cardholders don’t pay the total amount of credit card charges each month.
- About 11% say they usually pay only the minimum monthly payment but not much more.
- Traditionally, to make an accurate historical comparison of credit card debt, you had to consider population, inflation, and employment levels.
Historically, in the United States, household debt has been at its highest when the unemployment rate has been at its lowest. In the years when the unemployment rate was comparatively high, such as in 2010, people were reducing their credit card debt levels. However, when the unemployment rate was relatively low, such as in 2019 and 2021, credit card debt rose.
Credit card debt isn’t a new problem. Credit cards are addictive. People are tempted to buy something they can’t afford because they can swipe a card and receive their merchandise. There is no filling out a loan application and waiting for the money. The more you spend, the higher the credit limit you receive from the credit card issuer, so assuming you make your payments on time.
However, hidden within that higher credit limit and balance is the high cost of credit card debt—the interest rate. The average interest rate on bank-issued credit cards is 18.24% on newly offered cards and 14.46% on existing cards.
Aggressive lending practices have led to recessions and depressions. When the amount of debt in our economy starts to exceed what people can realistically repay, everybody suffers.
People imagine that credit cards are a necessary evil by assuming that they help families cover their bills when times are difficult.
People get into high-interest credit card debt as the economy grows and then have to struggle to pay it back at the same time that the job market is tightening.
Top 10 States with the Highest Credit Card Debt in the US
As of February 2021, the average credit card debt for an individual was highest in New Jersey at $7,872 and lowest at $5,441 in Kentucky.
Source: Lending Tree
As of 2nd Quarter 2021, total credit card debt statewide was highest in California, followed by Texas, Florida, and New York. In a side-by-side comparison to the same period in 2020, these four states’ total credit card debt increased an average of $3,871,895,572.
||Credit Card Debt (CCD)
||Increase In CCD
Source: Wallethub, Credit Card Debt Study Sept 9, 2021
Average Credit Card Debt by Income
Historically, higher income, $150K -$290K, means higher credit card balances, averaging $9,780 to $12,600. However, those with higher income typically have a higher credit limit. Generally, middle-income earners, $59K to $95K, carry the highest credit card debt at 55% to 56.8%.
Average Credit Card Debt by Race
The most significant amount of average credit card debt is held by white Americans at $6,940, followed by Hispanic Americans at $5,510, and Black Americans at $3,940
In general, minorities tend to earn less than white Americans, so they are less likely to qualify for higher-limit credit cards.
Average Credit Card Debt by Gender
In terms of gender in 2021, U.S. Men tended to have higher average credit card debt at $7,407, while women had average credit card debt of $5,245.
While women have made great strides in earnings over the years, in 2021, women earned $0.82 for each dollar earned by men.
Average Credit Card Debt by Generation
In 2020, almost every generation lowered credit card balances. Generation X and Baby Boomers had the highest average credit card debt levels and typically had higher credit card limits.
|Silent Generation (age 75+)
|Baby Boomers (age 56-74)
|Generation X (age 40-55)
|Millennials (age 24-39)
|Gen Z (age 18-23)
Average Credit Card Debt by Education Level
College graduates in the United States have the highest average credit card debt levels at $7,940. Those with no high school diploma have $3,390 in average credit card debt.
People with a higher education level that carry credit card debt tend to have higher credit card balances. However, of all consumers, between 53 and 57 pay off their credit cards regularly.
How COVID 19 Impacted Credit Card Debt in the US
The COVID-19 pandemic made people more cautious with their credit cards in 2020. The only period in U.S. history with a similar drop in American debt occurred in 2005 influenced by a considerable increase in bankruptcy filings in the United States. The natural assumption was that credit card balances would increase, and debt would increase because people would use credit cards to offset reduced income.
However, the opposite occurred. Consumers paid down a lot of credit card debt.
Revolving debt decreased in 2020 for various reasons:
- Americans dine out less, stopped traveling, and avoided crowded shopping malls as they sheltered in place due to COVID-19 restrictions and health safety mandates.
- During this same time, the federal government stepped in with financial help in the form of direct relief “stimulus” payments and extension of unemployment benefits for millions of workers who lost their jobs during the pandemic.
- After growing for eight years the average credit card balance dropped by 14% or $879 from 2019 to 2020. By 3rd Quarter 2021, debt was trending upward again.
The ongoing coronavirus increased the number of Americans using touch-free payment methods such as tap-and-pay, mobile pay, and mobile wallets like Apple Pay.
Businesses that enable contactless payment options do not have to worry about paying additional fees. They pay the same rates with a regular credit card transaction and enjoy all the benefits.
Cash is not always king. People like the convenience of not carrying so much cash and buying items today and pay for them tomorrow.
Credit Cards have become a way of life. Credit cards are not just used for retail purchases anymore. Many people use credit cards as part of their budget for medical expenses, groceries, etc.
People Pay Credit Balances on their terms. Almost half of consumers regularly carry a balance, and some only pay the minimum amount each month.
Credit Cards are a luxury of those with higher income and higher education.
Credit cards are not a great equalizer as women and minorities have lower debt balances than white males.
Middle Aged Baby Boomers tend to hold the highest debt balances.