What's the average American credit card debt?
Credit card debt in America by the numbers
That represents a 4.6% increase in a single quarter, with cardholders shouldering thirteen-figure debt at $1.03 trillion for the first time. In short, that amounts to an average balance of $5,733 per cardholder.
Credit card debt in America by the numbers
That represents a 4.6% increase in a single quarter, with cardholders shouldering thirteen-figure debt at $1.03 trillion for the first time. In short, that amounts to an average balance of $5,733 per cardholder.
There are a couple ways credit card debt can damage your credit score: High balances: A major factor in your credit score is your credit utilization ratio (your credit card balances divided by their credit limits). Once this number gets above about 30%, it's bad for your credit.
$5,000 in credit card debt can be quite costly in the long run. That's especially the case if you only make minimum payments each month. However, you don't have to accept decades of credit card debt.
Generation | Average Credit Card Balance March '22 | Average Credit Card Balance Feb '24 |
---|---|---|
Baby Boomer | $5,700 | $6,800 |
Gen X | $6,400 | $8,900 |
Millennial | $4,500 | $6,700 |
Gen Z | $2,000 | $3,300 |
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
“That's because the best balance transfer and personal loan terms are reserved for people with strong credit scores. $20,000 is a lot of credit card debt and it sounds like you're having trouble making progress,” says Rossman.
Some of the main consequences are: Your credit score could take a hit. Your credit utilization ratio compares your revolving credit accounts' balances and credit limits, and having a high utilization ratio can hurt your credit scores.
It's not at all uncommon for households to be swimming in more that twice as much credit card debt. But just because a $15,000 balance isn't rare doesn't mean it's a good thing. Credit card debt is seriously expensive. Most credit cards charge between 15% and 29% interest, so paying down that debt should be a priority.
How long will it take to pay off $20000 in credit card debt?
It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
However, multiple accounts may be difficult to track, resulting in missed payments that lower your credit score. You must decide what you can manage and what will make you appear most desirable. Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it.
Average American credit card debt by age
Across the different age groups in 2022, Gen Z, ages 18-25, had the lowest average credit card debt, at $2,854. But Gen Z also saw the biggest credit card debt increase over the previous year, at 25.1%. Millennials were close behind, with a 23.4% increase.
Gen X has the highest average debt balance in all categories, except for personal loans. Here's the breakdown: Credit cards: Gen X have the highest credit card balance compared to other age groups, at $8,215. Auto loans: Gen X have the highest auto loan balance, at $21,570.
The average debt an American owes is $104,215 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans. Data from Experian breaks down the average debt a consumer holds based on type, age, credit score, and state.
Gen X (ages 43 to 58) not only carries the most debt on average of all the generations, but is also the debt leader in credit card and total non-mortgage debt.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
The minimum payment mindset
Here's how most people get trapped in credit card debt: You use your card for a purchase you can't afford or want to defer payment, and then you make only the minimum payment that month. Soon, you are in the habit of using your card to purchase things beyond your budget.
Nearly Half of Americans Need Credit Cards To Cover Essential Living Expenses. The survey found that 48% of Americans depend on credit cards to cover essential living expenses. This is more common among younger generations: 59% of millennials use credit cards for living expenses.
Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment.
Which gender has more debt?
Women are stereotypically seen as irresponsible spenders, but the data doesn't back this up. According to a 2019 Experian study, men carry more debt than women across nearly all categories, including credit card debt — the study found that men have $125 more in credit card debt than women on average.
Generation | Ages | Credit Karma members' average credit card debt |
---|---|---|
Gen Z | Members 18–26 | $2,781 |
Millennial | 27–42 | $5,898 |
Gen X | 43–58 | $8,266 |
Baby boomer |
- Take advantage of a debt relief service.
- Consolidate your debt with a home equity loan.
- Take advantage of 0% balance transfer credit cards.
2020 findings by generation | Gen Z (ages 24 and younger) | Millennials / Gen Y (ages 25 to 40) |
---|---|---|
Average retail credit card balance | $1124 | $1871 |
Average non-mortgage debt | $10942 | $27251 |
Average mortgage debt | $172561 | $232372 |
Average 30–59 days past due delinquency rates | 1.60% | 2.70% |
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