How much credit card debt is the average American in?
What is the average credit card debt in the U.S.? 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.
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 $5,795 in January 2023 to $6,295 in January 2024.
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. And their credit journey usually begins early, with the average Gen Z consumer having 2.1 credit cards.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill? Well, that's not impossible either, though it is considerably less fun.
The average American has a credit card balance of $6,501, an all-time high, according to Experian. That's an increase from $5,910 in 2022 and $5,221 in 2021. Inflation and higher interest rates have led many consumers to put more on their credit cards.
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.
The average debt an American owes is $104,215 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans. Data from Experian breaks down the average debt a consumer holds based on type, age, credit score, and state.
Q3 2023 | Q3 2022 | |
---|---|---|
Gen Z18–26 | $3,262 $3,262 | $2,854 $2,854 |
Millennials27–42 | $6,521 $6,521 | $5,649 $5,649 |
Gen X43–58 | $9,123 $9,123 | $8,134 $8,134 |
Baby boomers59–77 | $6,642 $6,642 | $6,245 $6,245 |
In terms of savings accounts specifically, you'll likely find different estimates from different sources. The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.
While life today is very different from that pre-pandemic era, credit cards are just as stressful. For example, this year 35% reported maxing out their credit cards, which is a big improvement from five years ago, when just over half (50.08%) had hit their credit limit and three years ago, it dropped to 43%.
Which gender has more debt?
Men have 2% more credit card debt than women. Men have 20% more personal loan debt than women. Men have 16.3% more auto loan debt than women. Men have 9.7% more mortgage debt than women.
Living on credit cards can't last forever, because eventually you'll reach the end of your credit line. Consider it a stop-gap measure, not a permanent plan. “In a lot of cases, you won't know how long your emergency will last,” says Nitzsche. “It could be a few months, it could be a year.
The survey found that 48% of Americans depend on credit cards to cover essential living expenses. This is more common among younger generations: 59% of millennials use credit cards for living expenses.
Fewer than one quarter of American households live debt-free. Learning ways to tackle debt can help you get a handle on your finances.
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.
Is $2,000 too much credit card debt? $2,000 in credit card debt is manageable if you can pay more than the minimum each month. If it's hard to keep up with the payments, then you'll need to make some financial changes, such as tightening up your spending or refinancing your debt.
A good goal is to be debt-free by retirement age, either 65 or earlier if you want. If you have other goals, such as taking a sabbatical or starting a business, you should make sure that your debt isn't going to hold you back.
Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That's especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.
SAN MATEO, Calif., Aug. 22, 2023 /PRNewswire/ -- Despite most Americans having modest expectations of what it means to attain financial freedom, just 1-in-10 (11%) report they are living their definition of financial freedom, according to a new survey by Achieve, the leader in digital personal finance.
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.
What country has the most debt?
Ideally, financial experts like to see a DTI of no more than 15 to 20 percent of your net income. For example, a family with a $250 car payment and $100 of monthly credit card payments, and $2,500 net income per month would have a DTI of 14 percent ($350/$2,500 = 0.14 or 14%).
Prime (credit scores of 660-719) Super-prime (credit scores of 720 or above)
Gen Xers carry the most credit card debt on average, and saw their balances increase by 39% over the past year.
$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.
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