Based on data from the Federal Reserve Bank of New York and the U.S. Census Bureau (based on 2022 and 2021 data respectively), it can be calculated that each American household carries an average of $7,951 in credit card debt in a year.
In some cases, we receive a commission from our partners; however, our opinions are our own. Terms apply to offers listed on this page. The average debt in America is $103,358 across mortgages, auto loans, student loans, and credit cards.
The general rule of thumb is that you shouldn't spend more than 10 percent of your take-home income on credit card debt.
After several tumultuous years for the U.S. economy, the weight of consumer credit card debt has become increasingly burdensome. In fact, an average of 22.6% of American credit cardholders across the 100 largest metros have balances of at least $10,000 — an increase of 45.8% from 2019 and 32.9% from 2021.
The average credit card debt for someone in their 30s is $4,110, but that only tells part of the story about what America owes on their plastic. Credit card debt in America is a significant issue, with combined balances topping $1 trillion in the third quarter of 2023.
$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. There are a few things you can do to pay your debt off faster - potentially saving thousands of dollars in the process.
According to the GOBankingRates survey, 28% of Americans under the age of 24 have over $1,000 in credit card debt. Of those under 24 with credit card debt, 16% have debt between $1,001-$2,500, 10% have debt between $2,5001-$7,500 and 2% have debt of over $10,000.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill? Well, that's not impossible either, though it is considerably less fun.
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.
Statistics vary, but between 55 percent to 63 percent of Americans are likely living paycheck to paycheck.
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.
Average Credit Card Debt by Age
According to the most recent Transunion data from Q1 2023, those aged 40-49 had the highest average credit card balance of $7,600. The age group with the lowest average credit card balance was those under 29 at $2,900.
Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it. Credit agencies look for diversity in accounts, such as a mix of revolving and installment loans, to assess risk.
Men have 2% more credit card debt than women. Men have 20% more personal loan debt than women. Men have 16.3% more auto loan debt than women. Men have 9.7% more mortgage debt than women.
What is the average credit card debt in the U.S.? Based on data from the Federal Reserve Bank of New York and the U.S. Census Bureau (based on 2022 and 2021 data respectively), it can be calculated that each American household carries an average of $7,951 in credit card debt in a year.
Key takeaways. Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%. Any debt-to-income ratio above 43% is considered to be too much debt.
Having any credit card debt can be stressful, but $10,000 in credit card debt is a different level of stress. The average credit card interest rate is over 20%, so interest charges alone will take up a large chunk of your payments. On $10,000 in balances, you could end up paying over $2,000 per year in interest.
An increasing cost of living has not only added to many Americans' debt loads, but also made it harder for them to pay that debt off. According to our survey, the vast majority of Americans who currently have revolving credit card debt (89%) say they are trying to pay it off over the next 12 months.
In the U.S., the average credit score is 716, per Experian's latest data from the second quarter of 2023. And when you break down the average credit score by age, the typical American is hovering near or above that score.
Most consumers have credit scores that fall between 600 and 750. In 2022, the average FICO® Score☉ in the U.S. reached 714. Achieving a good credit score can help you qualify for a credit card or loan with a lower interest rate and better terms.
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.
Financial setbacks made it difficult to achieve milestones
In addition to the plethora of financial challenges consumers faced this past year, 65% of Americans experienced financial setbacks in 2023.
Almost 40% of American adults report they struggle to make ends meet each month, an increase from 34.4% in 2022 and 26.7% in 2021.
Average consumer household debt in 2023
The New York Fed's quarterly Household Debt and Credit Survey (HHDC) shows that total consumer debt stands at $17.29 trillion as of the third quarter of 2023. That's a record high. According to Experian, average total consumer household debt in 2023 is $103,358.