In 2022, Americans had $841 billion in credit card debt.
Unfortunately, it's not uncommon for Americans to have credit card debt. This type of debt can create financial hardship because it's high-interest debt. As a credit card balance rises and interest charges pile up, tackling the debt can be more challenging. How much credit card debt does the average American have? It may be more than you realize.
The average U.S. household has $6,473 in credit card debt
Many Americans use credit cards to pay for purchases, and it turns out many have outstanding account balances. According to data from Experian, the average American's credit card balance in the third quarter of 2021 was $5,221.
The Ascent examined research on American credit card debt and found that Americans had $841 billion in credit card debt in 2022. When considering the most recent U.S. credit card debt statistics and household data, the average American household has about $6,473 in credit card debt.
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While it can be convenient to use credit cards, it's risky to carry a balance. Unless you have a 0% APR credit card, you'll be charged interest on your unpaid debt, and your debt will continue to grow until you pay it off. Plus having significant debt can hurt your credit score.
Three tips to pay off your credit card debt
If you're among the masses of Americans struggling with credit card debt, you're not alone. Even if you have a lot of it, you can get out of credit card debt. Here are a few tips that may help you pay off your credit card debt faster:
1. Figure out how much debt you have
If you have credit card debt, it's best to be honest with yourself. While it can be upsetting realizing that you're in a difficult financial situation, it doesn't benefit you to ignore your debt. It will only continue to grow as you ignore it.
To pay off your debt, you'll need to be aware of how much debt you have. Now is a great time to sit down and calculate your total debt. Take note of each card's balance and interest rate. Doing this will make it easier for you to create a debt payoff plan.
2. Focus on the highest-interest debt first
The debt avalanche method can help you save on interest charges when paying down debt. With this debt payoff method, you'll focus on putting more money toward the highest-interest debt. While following this strategy, you'll want to continue making at least the minimum payment amount on all of your credit cards. By putting extra money toward the highest-interest credit card, you will save money in the long run.
3. Consider using a balance transfer card to save on interest
If you have a lot of outstanding debt and it feels overwhelming, you may consider applying for a balance transfer credit card. Many of the best balance transfer credit cards offer a 0% interest rate on balance transfers for 18 months or more, which gives you time to pay off the entire balance without paying additional interest charges.
You'll be charged a balance transfer fee to transfer your existing balance. These fees typically range from 3% to 5%. If you're transferring $7,200 in debt and are charged a 5% balance transfer fee, you'll pay $360 in fees. But that's not a bad price to pay for 0% interest. With the transferred balance plus the balance transfer fee, you'll have $7,560 in debt to pay off. If you pay $420 monthly for 18 months, you can pay the entire debt off in a year and a half.
Don't ignore your debt
Don't be embarrassed about your credit card debt. But make a plan to pay it down as quickly as possible so you don't continue to pay expensive credit card interest. You'll be more able to focus on other financial goals once you eliminate your credit card debt. For additional money management tips, check out our personal finance resources.
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FAQs
On an individual level, the overall average balance is around $6,501, per Experian's data. Other generations' credit card debt falls closer to that average or below. Here's the average amount of credit card debt Americans hold by age as of the third quarter of 2023, according to Experian.
What is the 2 3 4 rule for credit cards? ›
2/3/4 Rule
You can be approved for up to two new credit cards every rolling two-month period. You can be approved for up to three new credit cards every rolling 12-month period. You can be approved for up to four new credit cards every rolling 24-month period.
How much collective credit card debt do Americans carry? ›
Americans now owe a collective $1.13 trillion on their credit cards, according to a new report on household debt. Credit card balances increased by $50 billion, or roughly 5%, in the fourth quarter of 2023, the report found.
How many credit cards does the average person have? ›
How many credit cards does the average person have? According to the latest figures from Experian, the average American has 3.84 credit cards with an average credit limit of $30,365.
What is the average credit score in America? ›
What is the average credit score? 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.
What is considered high credit card debt? ›
The general rule of thumb is that you shouldn't spend more than 10 percent of your take-home income on credit card debt.
What is the 50 30 20 rule for credit cards? ›
Our 50/30/20 calculator divides your take-home income into suggested spending in three categories: 50% of net pay for needs, 30% for wants and 20% for savings and debt repayment. Find out how this budgeting approach applies to your money.
What is the rule of 72 for credit card debt? ›
What is the Rule of 72? Here's how it works: Divide 72 by your expected annual interest rate (as a percentage, not a decimal). The answer is roughly the number of years it will take for your money to double.
What is the 12 month rule for credit cards? ›
No interest rate increases for the first year.
Your credit card company cannot increase your rate for the first 12 months after you open an account. There are some exceptions: If your card has a variable interest rate tied to an index; your rate can go up whenever the index goes up.
What is the average mortgage debt in America? ›
How much mortgage debt does the average American have? The average mortgage debt among Americans is $244,498, per Experian's 2023 State of Credit Report. That's up from the average mortgage debt reported by Experian in 2022: $232,545.
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.
What is the average credit card debt held by Gen Z? ›
Gen Z has an average of $2,834 in credit card debt, over 25% more than millennials before them.
What is the average credit card debt carried by the average American? ›
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.
What is a good credit score? ›
For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2023, the average FICO® Score☉ in the U.S. reached 715.
How many credit cards do wealthy people have? ›
Millionaires are more likely to have multiple credit cards compared to the average American
| How many credit cards do you have | Net worth greater than $1 million | Net worth less than $1 million |
|---|
| 1 | 22% | 36% |
| 2 | 37% | 25% |
| 3 | 21% | 9% |
| 4 or more | 12% | 7% |
1 more rowMar 27, 2023
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.
What is the average rate on credit card debt? ›
What's the average interest rate on current credit card accounts?
| Category | Average APR |
|---|
| All credit card accounts | 21.51% |
| Accounts assessed interest | 22.76% |
Married Consumers Carry More Personal Loan, Credit Card Debt
| Average Debt Amounts by Marital Status and Debt Type | | |
|---|
| Marital Status | Personal Loan Debt | Credit Card Debt |
|---|
| Married | $18,799 | $6,881 |
| Single | $9,314 | $4,870 |
| U.S. Average | $16,259 | $6,194 |
Feb 24, 2020
Average American Credit Card Debt
The Federal Reserve study does not provide numbers for the average credit card balance per consumer. However, according to Transunion, this figure rose from $5,733 in the first quarter of 2023 to $6,218 in the first quarter of 2024.
