At the close of 2019, the average household had a credit card debt of $7,499. During the first quarter of 2021, it dropped to $6,209. In 2022, credit card debt rose again to $7,951 and has increased linearly. In 2023, it reached $8,599 — $75 shy of the 2024 average.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
High-interest credit card debt can devastate even the most thought-out financial plan. U.S. consumers carry $6,501 in credit card debt on average, according to Experian data, but if your balance is much higher—say, $20,000 or beyond—you may feel hopeless.
According to an Experian consumer credit review, Americans have an average of 3.84 credit cards per person. While that may seem like too many for some, others may consider it not enough. How many credit cards you should have in your wallet is a personal decision that's entirely up to you.
The average credit card balance in the UK is £1,675, as of May 2023. 78% of UK adults have at least one form of consumer credit. Individuals collectively borrowed a net £0.6 billion on credit cards, in July 2022. 21.6 million in the UK used cash either once a month or not all, in 2022.
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
Your debt-to-income ratio (DTI) measures your monthly debt payments against your monthly income. Typically, lenders use this ratio to evaluate your ability to take on more debt. Ideally, your DTI is below 36%. If it's higher, that's a potential sign of financial strain.
$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.
So, for the purposes of the study, Bank of America set a threshold — households spending at least 90% of their income on necessities could be considered living paycheck to paycheck. By that measure, around 30% of American households are living paycheck to paycheck, according to Bank of America's internal data.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
A general rule of thumb is to keep your credit utilization ratio below 30%. And if you really want to be an overachiever, aim for 10%.
U.S. state and local government outstanding debt 2022, by state. In 2022, the federal state of California had about 558.68 billion U.S. dollars of debt outstanding, the most out of any state.
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.
So, there's an easier ratio you can use to measure when you have too much credit card debt. It's your credit card debt ratio. Generally, you never want your minimum credit card payments to exceed 10 percent of your net income. Net income is the income you take home after taxes and other deductions.
For a score with a range of 300 to 850, a credit score of 670 to 739 is considered good. Credit scores of 740 and above are very good while 800 and higher are excellent.
“No matter what your income, $100,000 in debt is a very significant amount. The first step to take is to acknowledge it is a problem and that you need to take action now; it's not going to disappear on its own.”
800 to 850: Excellent Credit Score
Individuals in this range are considered to be low-risk borrowers.
Wealthy family borrows against its assets' growing value and uses the newly available cash to live off or invest in other assets, like rental properties. The family does NOT owe taxes on its asset-leveraged loans because the government doesn't tax borrowed money.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
Net worth is the difference between the values of your assets and liabilities. The average American net worth is $1,063,700, as of 2022. Net worth averages increase with age from $183,500 for those 35 and under to $1,794,600 for those 65 to 74. Net worth, however, tends to drop for those 75 and older.
The Gen X debt situation
The cohort also has the largest share of people with debt, nearly 99% carry some type of balance, LendingTree found. Gen Xers led the way in three of the four categories analyzed. The group — between 44 and 59 years old — has the highest median credit card, auto loan and student loan balances.