In December 2017 America owed a total of $834 billion in credit card debt alone — a 7 percent rise from 2016. When other sources of revolving consumer credit are included Americans owe a total of $1.027 trillion as of March of 2018. The outstanding revolving consumer credit is growing at a staggering rate and has surpassed revolving credit owed during the 2008 Great Recession.
Luckily, credit card default rates are down from the 6.7 percent peak during the Great Recession, but a large amount of revolving debt is not a good sign for the future. As 48 percent of credit card users make minimum payments on their credit cards and have an amount roll over to the next month, their total credit debt will become hard to pay off.
General Credit Card Debt Statistics
As the total credit card debt continues to rise in America it is important to note the causes of such a large debt. 15 percent of American families are living past their means and are spending more than they receive on a monthly basis. 43 percent of these families living past their income means are turning to credit card and revolving consumer credit borrowing to finance their expenses. As credit cards have a high annual percentage rate, many Americans are seeing their debts compound and grow at a staggering rate.
- Total revolving consumer credit debt reached $1.027 trillion in March of 2018. [Source: the Federal Reserve]
- Credit card debt hit $810 billion in quarter one of 2018. [Source: FRBNY]
- The average credit card balance was $6,354 in 2017. [Source: Experian]
- The average VantageScore was 675 in 2017. [Source: Experian]
- 15% of families report spending more money than they receive each month. [Source: Federal Reserve]
- 43% of Americans spend more than they receive each month borrow and use credit cards to finance the shortfall. [Source: Federal Reserve]
- 57% of Americans use credit cards for convenience and do not carry over a balance. [Source: Federal Reserve]
Credit Card Debt by Age
Generation Xers and Baby Boomers tend to carry more average credit card debt than any other generation. Gen Xers and Baby Boomers have on average higher monthly expenses as they have more dependents and a higher disposable income every year.
- Generation Z: $2,047 average credit card debt
- Generation Y: $4,315 average credit card debt
- Generation X: $7,750 average credit card debt
- Baby Boomers: $7,550 average credit card debt
- Silent Generation: $4,613 average credit card debt
Credit Card Debt by Income Level
Income level has a negative effect on credit card debt as the higher income Americans have, the higher average debt they take with them. Although the average debt increases as the income level increases, the average percent of debt per income decreases. Credit card debt accounts for 12 to 100 percent of American’s income who make less than $24,999, whereas it accounts for 7.2 percent to 5.2 percent of Americans with income from $115,000 to $159,999.
- Income Less than $24,999 a year: $3,000
- Income from $25,000 to $44,999 a year: $3,900
- Income from $45,000 to $69,999 a year: $4,900
- Income from $70,000 to $114,999 a year: $5,800
- Income from $115,000 to $159,999 a year: $8,300
- Income over $160,000 a year: $11,200
States With the Lowest Average Debt
Even on a state level average credit card debt is still high, with the lowest amounts averaging $5,000. Iowa has the lowest average credit card debt at 26 percent under the national average of $6,354.
- Iowa: $5,155
- Wisconsin: $5,363
- Mississippi: $5,421
- North Dakota: $5,511
- West Virginia: $5,547
States With the Highest Average Debt
The top five states with high average credit card debts are more than 10 percent above the national average. Alaska is the state with the highest average credit card debt, trending 36 percent over the national average.
- Alaska: $10,091
- Connecticut: $7,258
- Virginia: $7,161
- New Jersey: $7,151
- Maryland: $7,043
Average Household Credit Card Debt
By the end of 2017, the average American racked up an average debt of $6,354 on their credit cards. The average debt in America had increased 18.5 percent since 2013 which is a lower growth rate than the 19.2 percent credit card debt in America. The delay in the growth in the average credit card debt is predominantly caused by new credit card borrowers in America.
- 43.9% of families hold credit card debt in America. [Source: Federal Reserve]
- $6,354 in average credit card balance in America by the end of 2017. [Source: Experian]
- The average credit card debt among Americans increased by 18.5% since 2013. [Source: Federal Reserve Bank of New York]
- The average American will pay $1,183 in credit card interest. [Source: Federal Reserve]
Growth Of Average Credit Card Debt
Over the past five years, the average credit card debt has increased by 18.5 percent. The growth in the average Americans debt is lower than the 22 percent increase in total credit card debt in America. The slower increase of average debt is due to a growth in Americans who have credit cards.
- 2013: $6,224 average credit card debt.
- 2014: $6,360 average credit card debt.
- 2015: $6,587 average credit card debt.
- 2016: $6,940 average credit card debt.
- 2017: $7,377 average credit card debt.
The Federal Reserve Bank of St. Louis reported that the consumer credit delinquency rate sits at 2.4 percent in 2018, which is down from the 6.7 percent peak in 2009. The reported consumer credit delinquency rate also includes other sources of revolving loans and debt. When credit card debt is analyzed by itself the national delinquency rate is 1.69 percent. Credit card delinquency is on average lower because most users debt is still under their credit limit.
- >The consumer credit delinquency rate reached 2.43% quarter four in 2017. [Source: FRED]
- 1.96% national credit card delinquency rate in the United States. [Source: TransUnion]
States With The Highest Credit Card Delinquency Rates
The states with the highest credit card delinquency are more than 16 percent higher than the national average. Mississippi has the highest credit card delinquency rate of 3.14 percent which is 60 percent higher than the national average.
- Mississippi: 3.14%
- Louisiana: 2.46%
- Arkansas: 2.41%
- Georgia: 2.37%
- West Virginia: 2.28%
States With The Lowest Credit Card Delinquency Rates
The states with the lowest delinquency rates are over 64 percent lower than the national average. The state with the lowest delinquency rate is Wisconsin which is 76.5 percent under the national average.
- Wisconsin: 1.11%
- Washington: 1.12%
- Utah: 1.14%
- Minnesota: 1.15%
- Montana: 1.19%
As America’s credit card debt grows, it is important for many to focus on safe credit card spending and payment practices. Letting credit card payments roll over on a monthly basis can quickly get out of hand, leading to debt that will grow at a staggering rate. It is acceptable for Americans to have some credit card debt, especially when paying off large purchases. However, if a credit card is charging a high-interest rate it is important to pay off the debt before a large percent interest will start to kick in.
If there are negative items on your credit report impacting your score, contact Lexington Law to learn about your options.You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.