47+ Credit Card Debt Statistics & Facts: The Burden of Plastic Money

ByI. Mitic
September 15, 2021

Americans have become increasingly reliant on credit cards to finance their daily expenses, despite the fact that this is one of the most expensive ways to get money. In fact, the Federal Reserve reported late last year that US credit card debt has reached record highs. There are several reasons for this development.

First, the proportion of consumers who have access to payment cards has never been larger. According to TransUnion, nearly 200 million US consumers now have the ability to apply for a credit card, and that number is growing every year. Second, average US credit card debt has grown to a great extent due to the 2005 Bankruptcy Protection Act, which made filing for bankruptcy more difficult.

As a consequence, many people have started using credit cards as the fastest way to refinance debts or pay bills. Research has shown that Americans are generally satisfied with the economy at the federal level, with reduced unemployment and stock market growth among the biggest positives in their eyes. Because of this, many believe they can better manage their personal debt.

Nevertheless, wages still haven’t caught up with the increased cost of living. American workers’ purchasing power isn’t sufficient to satisfy their needs, which is why they’re spending more than they earn and piling up debt on their credit cards. Although higher spending has a positive impact on the economy, credit card interest rates can be too much of a burden for the average US income. This can reduce our ability to spend and create an overall negative trend.

For all these reasons, we’ve compiled this list of interesting US credit card debt statistics. We hope it gives you insight into the current situation and provides an answer to the question “What is the average credit card debt in 2021?” with respect to demographics, regions, income, and other factors.

Statistics on Credit Card Debt in the USA (Editor’s Choice)

  • The average American owns three credit cards.
  • Total national credit card debt dipped below $800 billion in 2020.
  • Nearly half of American adults (47%) had credit card debt at the beginning of the COVID-19 outbreak.
  • More than half (51%) of credit card holders have increased their credit balance as a consequence of the COVID-19 pandemic.
  • The average household credit card debt in America is $5,315.
  • 83% of adult Americans possess at least one credit card.
  • Generation X holds the largest number of credit cards and carries the highest debts.
  • Nearly one in five Americans say they depend on credit cards to cover basic living expenses.

General Credit Card Debt Stats & Facts

The total national credit card debt in the United States was $756 billion in Q3 of 2020.

(Experian State of Credit Cards)

This represents a drop of $73 billion or 9% from 2019. Consumer debt reduction was more pronounced with older generations: 16% with the Silent Generation but only 6% with Generation Z.

Nearly half of American adults (47%) had credit card debt at the beginning of the COVID-19 outbreak.

(CreditCards) 

What percentage of Americans have credit card debt? As of May 2020, the number of Americans in credit card debt reached nearly half of America’s total adult population. While newer data is still being processed, things got a lot worse for most people during the pandemic, so it’s safe to assume we are past the 50% mark by now. 

More than half (51%) of credit card holders have increased their credit balance as a consequence of the COVID-19 pandemic.

(CreditCards) 

The crisis affected millennials the most, with 56% going further into debt and 55% relating that problem directly to the pandemic itself.

83% of adult Americans possess at least one credit card. 

(Federal Reserve)

The share of people owning a credit card is higher among those who have larger incomes, are better educated, and are white.

Characteristic Percent
Income
Less than $40,000     65
$40,000 - $100,000 91
Greater than $100,000 97
Education
High school degree or less 73
Some college or associate degree     81
Bachelor's degree or more 95
Race / Ethnicity
White 87
Black 70
Hispanic 76
Overall 83

Percentage of U.S. citizens with at least one credit card. (Federal Reserve)

The average household credit card debt in America has gone down to just over $5,000 in 2020.

(Experian Consumer Credit Review)

How much credit card debt does the average American have? Well, the credit card balance of a typical US citizen was $6,194 in 2019, but by 2020 that number had gone down 14% to $5,315.

Credit card statistics highlight how many Americans are in debt. In 2016, 15% of US households reported spending more than they received in income.

(Federal Reserve)

The percentage of individual Americans who spend more than they earn on a monthly basis is much bigger: 43%. Credit cards are the most common means of financing the average family income shortfall. 

The average American owns three credit cards.

(Experian State of Credit 2020)

This is roughly in line with previous years, with a slight decline compared to 2019’s average of 3.07. The average number of retail credit cards also dropped from 2019’s 2.51 to 2.42 per person in 2020.

Nearly half of Americans (44%) carry a balance on their credit cards.

(Charles Schwab Corporation)

According to a survey carried out by Charles Schwab Corporation in 2019, 44% of US consumers have a balance on their credit cards, while 56% use them for convenience only. 

An increasing number of users are signing up for secured credit cards.

(Consumer Financial Protection Bureau)

A secured card is a type of a credit card that requires a cash deposit. People often use secured cards to build their credit history; the higher the deposit, the larger the limit on the credit card. This growth is driven by subprime consumers and people without a credit history. For example, 7% more users applied for secured cards in 2016 than in 2015. 

Consumers who prefer using credit cards make approximately 25 of their 50 monthly transactions using a credit card.

(Federal Reserve Bank of San Francisco) 

Credit card usage statistics show the growing popularity of this payment method. In 2017, 29% of consumers preferred making payments using credit cards.

Preferred payment methods, 2017 data

Preferred payment methods, 2017 data (Federal Reserve Bank of San Francisco)

In 2017, total credit card payments accounted for 55% of the overall value of card payments.

(Federal Reserve)

The amount spent using credit cards was $3.60 trillion, compared with $2.88 trillion for debit cards.

The average American credit card debt grew by 52% between 2000 and 2019, but dropped significantly in 2020.

(ValuePenguin) (Household Debt and Credit Report, NewYorkFed)

The COVID-19 outbreak made people much more cautious with their credit card funds in 2020. The only period with a similar drop in American debt occurred in 2005, when it was influenced by a huge increase in bankruptcy filings in the United States.

The average credit card utilization rate was just over 25% in 2020.

(Experian Consumer Credit Review)

Credit card utilization represents how much revolving credit is in use compared to the available limit. This is a decrease from 28.8% in 2019, and shows a trend of more careful spending in light of the COVID-19 outbreak. 

The top three credit card issuers in the United States are American Express, Chase, and Citibank.

(The Nilson Report)

Rankings within the credit card industry are based on purchase volume in billions of dollars. Americans have spent $754.92 billion using American Express credit cards, $739.48 billion using Chase cards, and $410.43 billion using Citibank cards. Other top issuers are Bank of America ($360.73 billion), Capital One ($336 billion), and US Bank ($145.69 billion). 

Nearly one in five Americans say they depend on credit cards to cover basic living expenses.

(Forbes, The Motley Fool)

According to a survey of 1,000 American credit card holders, 50% of respondents said they have maxed out their credit cards, while 23% are planning to open an additional credit card account to make ends meet. 

According to credit card debt facts from 2017, fewer than half of US cardholders paid their credit card debts in full on a monthly basis.

(Federal Reserve)

More precisely, 45% paid their credit card balance in its entirety each month, 27% carried a balance regularly, and the same percentage had carried a balance at least once during the same year. 

Americans increased their credit card balances by $55 billion between 2016 and 2019, but they rapidly dropped in 2020 due to COVID-19.

(Investopedia)

Credit card balances are growing, notwithstanding the temporary dip caused by the pandemic. If the overall US household debt continues to grow faster than the country’s GDP, it could cause an economic slowdown in the following years.

In 2018, revolving credit (which mostly consists of US credit card debt) increased by $11.2 billion.

(Federal Reserve, Fortune)

This increase broke the record set in 2008, just before the global financial crisis, which is also ominously known as the Great Recession.

Cardholders have fewer credit cards than before the Great Recession.

(Consumer Financial Protection Bureau)

Although new account volume is roughly 50% higher than it was immediately after the crisis, it still hasn’t returned to its level prior to the 2007-08 recession. 

Credit card delinquency was at its highest in 2009, when it was 6.77%.

(Federal Reserve Bank of St. Louis, Investopedia)

Today it is relatively low and sustainable at around 2.50%. A credit card loan is considered delinquent if the borrower has missed two consecutive payments and is therefore 60 days late. If this is the case, the issuer applies credit card default rates to the account. 

The average credit card interest rate is just over 20%

(The Balance) 

At the time of writing, average credit card payments are slightly higher than during the same period last year. The annual percentage rate is at 20.20% across all credit cards, with store credit cards having the highest percentage (24.24%) and business credit cards having the lowest one (17.81%).

Credit card debt at Christmas: Around two-thirds of Americans were forecast to take on record credit card debt during the 2020 holidays.

(LendEdu) 

Of all respondents, 63% said it would be the largest credit card debt they have ever taken on. This number grows to a staggering 75% if we consider only people who have been laid off due to the pandemic.

In 2018, the average American accumulated $1,230 in debt over the holiday period.

(MagnifyMoney)

This was an increase from $1,054 during the previous year’s holiday season. If a consumer were to make minimum payments of $30 per month at the current average credit card interest rate, it would take them more than five years to repay this holiday debt. As in 2017, 68% of this holiday debt was generated using credit cards. 

In 2016, consumers around the world spent more using credit and debit cards then they did in cash for the first time.

(MarketWatch, Euromonitor International)

During that year, consumers worldwide spent about $23 trillion using payment cards and $22.6 trillion using cash. 

Credit Card Debt Demographics

When it comes to average credit card debt by age, the number is highest among people aged 45 to 54.

(TheStreet)

People in this age group owe $9,096 on average. They are followed by Americans approaching their peak earning years and those aged between 55 and 64, with both groups owing more than $8,000 on average. Retired Americans have a median credit card debt of over $6,000.

Around 87% of adult consumers older than 65 have a credit card.

(Quartz, Federal Reserve Bank of Boston)

They are followed by consumers aged between 55 and 64 (78.1%), while 70.5% of users aged 45-54 use plastic money. The younger age groups show slightly less of an inclination to opt for credit: the 35 to 44 and 25 to 34 demographics sit somewhere around 69%, while fewer than 50% of consumers younger than 25 are credit card owners

The share of people who have a credit card by age

Generation X holds the largest number of credit cards and carries the highest debts.

(Gallup)

Traditionalists (people aged between 75 and 80) are the least indebted among all age groups. The percentage of Americans with credit card debt is lowest among millennials, which is partly due to the Credit Card Act of 2009. The statute made it harder for consumers under the age of 21 to get a credit card. 

39% of US adults use their credit card as a purchase method because of the points or rewards they can earn.

(National Foundation for Credit Counseling)

Older Americans are more likely than younger ones to use credit cards for the purpose of earning points or rewards (43% versus 31%). 

Younger Americans are more likely than older ones to have committed some kind of credit card blunder.

(National Foundation for Credit Counseling)

According to the 2017 Consumer Financial Literacy Survey by NFCC, younger adults are more likely to be rejected for a new credit card (11% versus 6% during the 12 months prior to publishing the survey), to be late in making a credit card payment (11% versus 5%), to miss a payment (12% versus 4%), or to make a payment that was less than the minimum required (13% versus 3%). 

Access to credit cards is not evenly spread across the United States.

(Federal Reserve)

For example, in 2013, only 20% of Caucasian Americans did not have at least one credit card, compared with 30% of Latinos and 47% of African Americans. 

Minority communities in the US generally have lower credit scores, but they also carry less credit card debt.

(Dēmos, Creditcards.com)

In 2013, Caucasian Americans had an average balance of around $7,000 on their credit cards, while Latinos and African Americans had $6,066 and $5,784 respectively. The average African American citizen spent $368 monthly on all credit cards, while the average Latino spent $483 per month. The average credit card APR is higher for African Americans and Latinos. 

  White African American Latino
Average Credit Card Debt $7,315 $5,784 $6,066
Total Monthly Payment on all Cards $609 $368 $483
Average Annual Percentage Rate of Card with the Highest Balance 15.8% 17.7% 17.9%

Average debt and APR overview by ethnicity. (Dēmos)

On average, men carry significantly more debt on their credit cards than women.

(ValuePenguin)

Female householders generally have 22% less credit card debt than their male counterparts. 

Men are more likely to never carry a balance on their credit cards and pay off debts each month.

(BMO Harris Bank)

According to a survey by BMO Harris Bank, 14% of men and 10% of women say they pay off their credit cards every month. 

Women are generally more concerned than men about paying off their credit card debt.

(BMO Harris Bank)

This BMO Harris Bank survey suggests 35% of women see their credit card debt as a major financial concern compared to only 22% of men. 

(CreditCards)

Debit cards are used by 85% of students, compared to credit cards, which are used by just 57% students. That said, the latter figure has increased by 1% year-over-year, while debit card usage percentages have largely stayed the same since 2016.

US Credit Card Debt by Income

Credit card debt is most prominent in the $40,000 to $80,000 income bracket (48%)

(CreditCards)

Furthermore, you are more likely to have credit card debt if you earn over $80,000 (40%) than if you make less than $40,000 per year (36%)

Americans who earn less than $25,000 have an average debt of $3,000, while those with the highest credit score (with an income over $160,000) owe $11,200 on average.

(Federal Reserve, Lexington Law)

In other words, people with a yearly salary of up to $24,999 have a credit card debt ranging from 12% to 100% of their income. For Americans who earn between $115,000 and $159,999, this percentage typically ranges from 7.2% to 5.2%. 

About 29% of credit card users usually make minimum or low debt payments on a monthly basis.

(National Bureau of Economic Research)

People with incomes over $150,000 are the most likely to pay off their credit card balance in full, but they still make minimum or low payments 38% of the time. Those who earn less than $50,000 annually make low payments 50% of the time. 

There were more than 500 million open credit card accounts in the United States in Q1 2020.

(Federal Reserve Bank of New York) 

This represents a much steeper growth compared to Q1 of 2019’s figures against those from Q1 2018. Despite the outbreak of the COVID-19 virus and the overall decrease in credit card spending, many more people decided to get credit cards during 2020.

The average credit score in the United States is 710.

(Experian Consumer Credit Review)

According to Experian, 2020 saw a record high average credit score of 710, up from 703 in 2019. Your credit score has an influence on determining your interest rate for credit cards, mortgages, and loans. 

The average VantageScore in 2020 reached an all-time high of 688.

(Experian State of Credit 2020)

This was a year-over-year increase of 6% from 2019. VantageScore is a product of a collaboration between the major US credit reporting agencies: Equifax, TransUnion, and Experian. The number is obtained using the same criteria as for a FICO credit score and also ranges from 300 to 850.  

In contrast to a FICO credit score, which requires at least six months of credit history, a VantageScore requires only a month of history and one account open within the past two years. Therefore, the latter is suitable for millions of US consumers who want to prove their trustworthiness before FICO has enough data to issue them a credit score. 

Here’s another illustration of the average household income in the States: The percentage of consumers with an excellent credit score (between 800-850) is 20.7%.

(The Motley Fool)

The majority of Americans have good to excellent credit scores. The percentage of the population with credit scores below 600 has dropped from more than 25% in 2009 to less than 20% today. 

Nearly two-thirds of Americans (64%) believe they’ll be debt free within a decade.

Around 48% believe that it will happen within five years, while a fortunate 14% estimate being debt-free in just one year.  

(CreditCards) 

Credit Card Debt by US State

Alaska is the US state with the highest average credit card debt: $6,617 in the first quarter of 2019.

(Experian State of Credit Cards)

It’s followed by Connecticut ($6,040), Virginia ($5,992), and New Jersey ($5,978).

Iowa has the lowest average credit card debt among US states ($4,289).

(Experian State of Credit Cards)

According to data from Experian, Iowa is followed by Wisconsin ($4,376), Kentucky ($4,521),  Idaho ($4,582), and South Dakota ($4,633). 

Currently, the US state with the highest credit card delinquency rate is Mississippi (3.14%).

(Lexington Law, TransUnion)

Mississippi is followed by Louisiana (2.46%), Arkansas (2.41%), Georgia (2.37%), and West Virginia (2.28). These states have a 16% higher delinquency rate than the national average. 

The US states with the lowest credit card delinquency rates are over 64% lower than the national average.

(Lexington Law, TransUnion)

The state with the lowest credit card delinquency rate is Wisconsin (1.11%), followed by Washington (1.12%), Utah (1.14%), Minnesota (1.15%), and Montana (1.19%). 

Make Good on Debts

As you can see, American credit card debt statistics indicate some worrying trends. For the wellbeing of your household, you should always spend responsibly and keep a record of the debts on each of your credit cards. 

Put everything on paper and create a repayment plan that’s realistic for your budget. This will help you decide whether to repay the debt with the highest balance or with the highest interest rate first. And, most importantly, try to pay off your debts on time, both to improve your credit history and reduce the interest you end up paying.

About author

For years, the clients I worked for were banks. That gave me an insider’s view of how banks and other institutions create financial products and services. Then I entered the world of journalism. Fortunly is the result of our fantastic team’s hard work. I use the knowledge I acquired as a bank copywriter to create valuable content that will help you make the best possible financial decisions.

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