Interesting analysis of credit card debt by household income, race, state (Alaska hit the jackpot), etc
Wow! Cohort-wise, it turns out I live in Wisconsin, am part of Gen Z, and am Asian!
Pete
That report is 18 months old. I wonder what it is like now.
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Here’s a more up to date story without the demographic breakdown.
The part that I found most interesting. was near the end. While some are in deep credit card debt, the average being, over $6,300. Over half of the credit card users pay off their balance monthly.
On the other side of the divide, just over half of cardholders — or 54% — typically pay in full, thereby avoiding interest, according to another report by Bankrate. “Their card usage is counted among balances but isn’t true debt like the other 46% of cardholders are facing,” said Ted Rossman, Bankrate’s senior industry analyst.
By way of example: With annual percentage rates just over 20%, if you made minimum payments toward the average credit card balance ($6,371), it would take you more than 18 years to pay off the debt and cost you $9,259 in interest over that time period, Rossman calculated.
“There’s a huge difference between someone who uses credit cards for rewards and convenience versus someone who is carrying pricey debt for years.”
So half of that $1.21 trillion goes poof at the end of the month. At least our portion does.
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“Credit card debt reaches $1.21 trillion — in line with last year’s all-time high”
And for some reason these news items seldom figure in inflation. Going back to the second quarter of 2019 (pre-pandemic) the CC debt was $870 billion. Adjust that for inflation and you have $1.1 trillion. The US population has also grown by 5%.
$1.09 trillion x 1.05 = $1.14 trillion
This means that the average credit card debt has only increased by 6% in six years.
DB2
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What do you mean by “only”? Many folks here would joyously accept an investment return of 6% above inflation!
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I don’t think that’s right. Half of the card holders pay off their debt monthly. Not half of the card debt.
I’d hazard a guess that many of those who pay off monthly are paying less than that 6k figure each month. So removing those balances would likely increase the average and median balance significantly.
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What surprises me is that this credit card data is not being analyzed in the context of the tariffs. In Q2, companies greatly increased buying to stock up before the tariffs were scheduled to be applied. Inventories increased 228%! https://deposco.com/blog/statistics-supply-chain-tariff-impact/
Why wouldn’t one expect consumers to have the same mentality? In fact, it appears they did. US consumers rush to buy big-ticket items before Trump tariffs kick in | AP News
I’m guessing this increase in consumer activity was a one-time thing, everyone buying their imported appliances before this administration hits the fan. I suspect credit card balances will decline as consumers stop spending because of higher prices. Consumer confidence in Aug2025 was about where it was during the pandemic. It remains on a downward trend.
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Well, yes, but that real 6% was over six years – meaning less than 1% per year.
DB2
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I think you’re right that the credit card holders who are paying off their debt each month probably don’t account for 50%+ of the CC debt. But I do think $6,000 in CC spending per month is not unreasonable for a family.
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It’s certainly possible. I don’t doubt that. But its an awful lot.
$6k in spending per month is $72k per year. Let’s add in $3k per month in mortgage/insurance/prop taxes (or rent - take your pick). Now were at $108k. With 10% of gross going to savings and 20% of gross going to taxes, we’re talking about $154k of annual income to generate $6k of monthly spending.
I put everything possible on the credit card for 2 reasons: 1 - rewards points that help fund my woodworking hobby and DW’s gardening hobby. 2 - simplification of recurring bills.
So we easily put $6k a month on the credit card and more importantly easily pay it off every month. It is very rare that we pay any other way.
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I don’t think the situation looks bad. Unemployment is currently low. Consumers aren’t carrying excessive debt, aren’t carrying excessive debt relative to their disposable incomes and aren’t defaulting at high rates.
https://fred.stlouisfed.org/graph/?g=1ofN0
https://fred.stlouisfed.org/series/CDSP
https://fred.stlouisfed.org/series/DRCCLACBS
Wendy
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On the other hand, the five year trend is not particularly good,
credit card debt is near historic highs, Credit card debt reaches $1.21 trillion — in line with last year's all-time high, NY Fed finds
inflation is on the rise, https://www.bankrate.com/banking/federal-reserve/latest-inflation-statistics/
and the economy is slowing https://www.nytimes.com/2025/07/30/business/us-economy-grew-in-second-quarter-as-tariffs-scrambled-data.html
I read these tea leaves as suggesting that credit card delinquencies may be teetering on a razor’s edge.
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As noted upthread, the increase in real debt per capita has been less than 1% per year over the last six years.
DB2
Immediately after COVID, credit card debt, delinquency were super low, they were normalizing until 4Q 2024. Bank CEO’s have been warning about this from 2021… If you truly want to compare, look at pre-COVID numbers.
COVID literally shutdown the entire economy and rebooted it. I think our economic numbers, policy, are yet to fully understand and reflect that.
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See the nosedive in 2021.. so while the delinquency rates have come up, it is nothing to worry about, it is very much within the normal level.
Also, consider, banks have been building reserves for the last few years and well reserved for this scenario.
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Note that the graph I pasted shows 30 day delinquency levels in 2024 approaching that seen prior to the 2008 crash.
Here is the percent of people who are 90 day delinquent. Again we are at level just prior to 2008.
Yes growth is slowing in early 2025, but note in graph the delinquency share was declining from 2005-2007 and we know what happened in 2007-8.
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