According to the SCF data, 46% of American households held credit card debt in 2022, and while credit card debt accounted for only about 2% of overall household debt, its interest rates tend to be higher than those of other forms of consumer debt, making it relatively expensive.
What you are doing is fine. Ideally, you want to show some balance when the bank reports this to the credit agencies, because that shows you are actively using your card and being responsible and paying it.
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.
Nearly half of credit card users are carrying debt — it may take months, or years, to pay off. Almost half, 48%, of credit cardholders carry debt from month to month, according to a new report. Most blame an unexpected emergency expense although higher costs and overspending are also factors.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
$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.
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.
Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.
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.
Carrying a balance does not help your credit score, so it's always best to pay your balance in full each month. The impact of not paying in full each month depends on how large of a balance you're carrying compared to your credit limit.
To maintain a healthy credit score, it's important to keep your credit utilization rate (CUR) low. The general rule of thumb has been that you don't want your CUR to exceed 30%, but increasingly financial experts are recommending that you don't want to go above 10% if you really want an excellent credit score.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
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.
As Business Insider reported, new data reveals that the average debt an American consumer holds is $104,215. That figure includes mortgages, auto loans, credit cards, student loans, personal loans, and other types of debt.
That's a record-high percentage — the highest (tied with 2023) since Bankrate began asking the question in 2011. Additionally, 54 percent of U.S. adults have more in their emergency fund or savings, and 10 percent have no credit card debt and no savings.
If you pay off all your credit card accounts (not just the one you're canceling) to $0 before canceling your card, you can avoid a decrease in your credit score. Typically, leaving your credit card accounts open is the best option, even if you're not using them.
So, while there is no absolute number that is considered too many, it's best to only apply for and carry the cards you need and can justify using based on your credit score, ability to pay balances and rewards aspirations.
“Three or four is a good number for a lot of people, but you can build credit with as little as one,” Rossman said. Research from Experian found U.S. consumers carried 3.9 credit cards on average in 2023 — down from 4.2 in 2017. But Americans with exceptional FICO scores — 800 to 850 — had 4.8 credit cards on average.
Even better, just over 1 in 5 people (21.2%) have an exceptional FICO credit score of 800 or above, all but guaranteeing access to the best products and interest rates.
Home loans
Your credit score might be only one piece of your home mortgage application, but it's among the most critical. With a 705 credit score, you're well above the 620 baseline score needed to qualify for most home loans, but borrowers with a 740 score or higher will typically get a better interest rate.
Nearly half of Americans score between 750 and 850, in the very good to exceptional range, while less than 25% of Americans have a score between 300 and 649, the poor to fair credit score range.
Down payment, cash advances or balance transfers
A good rule to abide by is to not rely on a credit card for any kind of down payment. It will add to a larger cost and may be a sign that you shouldn't make the purchase. In addition, cash advances usually charge a higher rate than purchases.
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.