Business

Average Credit Card Debt in the U.S. in 2018

Posted July 16, 2018 12:00 a.m. EDT
Updated July 16, 2018 6:00 p.m. EDT

Even as household income and employment rates are ticking up in the U.S., credit card balances are at all-time highs. And as the Fed raises rates, credit card rates rise in tandem, meaning consumers could pay billions in extra interest charges.

We’ve updated our statistics on credit card debt in America to illustrate how much consumers are now taking on.

  • Americans paid banks $104 billion in credit card interest and fees in 2018, up 11% from the prior year, and up 35% over the last five years, as Fed rate increases have been passed on to consumers. MagnifyMoney analyzed FDIC data through March, 2018 for each bank whose deposits are insured by the FDIC.
  • With potentially four Fed rate hikes left to come this year, we estimate the increase in interest and fees paid in the coming year will once again be above 10%, putting Americans on track to pay over $110 billion. Our analysis of the impact of Fed rate hikes found credit card rates are the most sensitive to Fed rate hikes, rising more than twice as fast as mortgage rates.
  • Average APRs on credit card accounts assessed interest are now 15.5%, up nearly 300 basis points in five years, according to the Federal Reserve.

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  • Total revolving credit balances are $1.04 trillion as of May, 2018. The figure, reported monthly by the Federal Reserve, is the total amount of revolving credit balances reported by financial institutions, the overwhelming majority of which are credit and retail card balances, according to the CFPB. As of March 2018, non- card-related revolving balances such as overdraft lines of credit were approximately $73 billion according to our analysis of the FDIC data used by the Federal Reserve to calculate total revolving balances.

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  • Americans carry $687 billion in credit card debtthat is not paid in full each month. This estimate includes people paying interest, as well as those carrying a balance on a card with a 0% intro rate. We based the estimate on a CFPB study of credit card account data that found 29% of total credit card balances are paid off each month, implying 71% of credit card balances revolve each month. We applied the percentage to the Federal Reserve’s revolving credit balance data less $72 billion in non-credit card revolving debt to reach $687 billion in credit card balances carried over month to month.
  • 44% of credit card accounts aren’t paid in full each month, according to the American Bankers Association. Those that don’t pay in full tend to have higher balances, which is why the percentage of balances not paid in full (71%) is higher than the percentage of accounts not paid in full (44%).
  • The average credit card balance is $6,348 for individuals with a credit card, according to Experian. This excludes store credit cards, which have an average balance of $1,841. Both figures include the statement balances of individuals who pay their balance in full each month.

Credit card use

  • Number of Americans who actively use credit cards: 175 million as of 2018, according to Transunion
  • Average number of credit cards per consumer: 3.1, according to Experian. That doesn’t include an average of 2.5 retail credit cards.
  • Number of Americans who carry credit card debt month to month: 70 million.

Credit card debt

The following estimates only include the credit card balances of those who carry credit card debt from month to month — they exclude balances of those who pay in full each month.

  • Total credit card debt in the U.S. (not paid in full each month): $687 billion
  • Average APR: 15.54% (also excludes those with a 0% promotional rate for a balance transfer or purchases)
    • This estimate comes from the Federal Reserve’s monthly reporting of APRs on accounts assessed interest by banks.

Credit card balances

The following figures include the credit card statement balances of all credit card users, including those who pay their bill in full each month.

  • Total credit card balances: nearly $1.04 trillion as of May 2018, an increase of 5% percent from the previous year. This includes credit and retail cards, and a small amount of overdraft line of credit balances.
  • Average credit card balance: $6,358, according to Experian (excludes retail credit cards, which have lower balances. The average consumer has $1,841 in balances on retail cards and we estimate combining all consumers with retail or credit card debt the average is approximately $5,000 per individual). All averages include those who pay their bill in full each month.

Who pays off their credit card bills?

According to the American Bankers Association, as of the end of 2017, accounts that are paid in full versus carrying debt month to month comprise the following mix of open credit card accounts:

  • Revolvers (carry debt month to month): 44 percent of credit card accounts
  • Transactors (use card, but pay in full): 29.5 percent of credit card accounts
  • Dormant (have a card, but don’t use it actively): 26.5 percent of credit card accounts

Delinquency rates

Credit card debt becomes delinquent when a bank reports a missed payment to the major credit reporting bureaus. Banks typically don’t report a missed payment until a person is at least 30 days late in paying. When a consumer doesn’t pay for at least 90 days, the credit card balance becomes seriously delinquent. Banks are very likely to take a total loss on seriously delinquent balances.

Delinquency rates peaked in 2009 at nearly 7%, but in 2018 they have remained below 3%. 

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Debt burden by income

Those with the highest credit card debts aren’t necessarily the most financially insecure. According to the 2016 Survey of Consumer Finances, the top 10 percent of income earners who carried credit card debt had nearly twice as much debt as average.

However, people with lower incomes have more burdensome credit card debt loads. Consumers in the lowest earning quintile had an average credit card debt of $2,100. However, their debt-to-income ratio was 13.9 percent. On the high end, earners in the top decile had an average of $12,500 in credit card debt. But debt-to-income ratio was just 4.8 percent.

Income Percentile

Median Income

Average CC Debt

CC Debt: Income Ratio

0%-20%

$15,100

$2,100

13.9%

20%-40%

$31,400

$3,800

12.1%

40%-60%

$52,700

$4,400

8.3%

60%-80%

$86,100

$6,800

7.9%

80%-90%

$136,000

$8,700

6.4%

90%-100%

$260,200

$12,500

4.8%

Source:Data from 2016 Survey of Consumer Finances.

Although high-income earners have more manageable credit card debt loads on average, they aren’t taking steps to pay off the debt faster than lower income debt carriers. In fact, high-income earners are as likely to pay the minimum as those with below average incomes. If an economic recession leads to job losses at all wage levels, we could see high levels of credit card debt in default.

Generational differences in credit card use

In 2017, Generation X surpassed the baby boomer generation to have the highest credit card balances. Experian estimates that on average, Generation X has a balance of $7,750 per person, 21.94% more than the national average ($6,354). Boomers carry nearly as much as Generation X with an average balance of $7,550.

At the other end of the spectrum, millennials, who are often characterized as frivolous spenders and are too quick to take on debt, have nearly the lowest credit card balances. Their median balance clocks in at $4,315. The youngest generation, Gen Z, has the smallest average balance of $2,047 per person.34

How does your state compare?

Using data from the Federal Reserve Bank of New York Consumer Credit Panel and Equifax, you can compare median credit card balances and credit card delinquency.

State

Credit Card Debt Per Debtor

Credit Card Debt Per House

Alabama

$3,710.56

$7,198.48

Alaska

$5,879.85

$11,406.91

Arizona

$4,299.70

$8,341.42

Arkansas

$3,289.01

$6,380.69

California

$4,569.51

$8,864.85

Colorado

$4,898.56

$9,503.20

Connecticut

$5,171.89

$10,033.47

Delaware

$4,338.88

$8,417.42

Florida

$4,318.35

$8,377.59

Georgia

$4,727.46

$9,171.27

Hawaii

$5,330.46

$10,341.09

Idaho

$3,791.84

$7,356.18

Illinois

$4,412.71

$8,560.65

Indiana

$3,624.05

$7,030.65

Iowa

$3,169.16

$6,148.17

Kansas

$3,854.05

$7,476.85

Kentucky

$3,457.67

$6,707.88

Louisiana

$3,767.91

$7,309.75

Maine

$3,905.56

$7,576.78

Maryland

$5,287.61

$10,257.96

Massachusetts

$4,720.53

$9,157.83

Michigan

$3,458.51

$6,709.51

Minnesota

$4,257.26

$8,259.08

Mississippi

$3,204.95

$6,217.60

Missouri

$3,763.46

$7,301.11

Montana

$3,732.83

$7,241.69

Nebraska

$3,594.46

$6,973.25

Nevada

$4,263.19

$8,270.59

New Hampshire

$4,943.44

$9,590.27

New Jersey

$5,361.06

$10,400.47

New Mexico

$4,185.93

$8,120.71

New York

$4,969.84

$9,641.50

North Carolina

$4,124.04

$8,000.63

North Dakota

$3,756.19

$7,287.00

Ohio

$3,738.95

$7,253.56

Oklahoma

$4,038.90

$7,835.47

Oregon

$3,881.17

$7,529.48

Pennsylvania

$4,209.21

$8,165.86

Rhode Island

$4,376.34

$8,490.10

South Carolina

$4,187.65

$8,124.04

South Dakota

$3,608.28

$7,000.07

Tennessee

$3,903.24

$7,572.28

Texas

$4,937.00

$9,577.78

Utah

$3,775.21

$7,323.92

Vermont

$4,199.77

$8,147.56

Virginia

$5,404.32

$10,484.38

Washington

$4,568.09

$8,862.09

West Virginia

$3,381.36

$6,559.84

Wisconsin

$3,410.29

$6,615.96

Wyoming

$3,944.72

$7,652.76

Source:Federal Reserve Bank of New York and Equifax Consumer Credit Panel and MagnifyMoney.

State

Silent

Boomers

Gen X

Millennials

Gen Z

Alaska

$5,456

$9,495

$8,995

$4,464

$1,518

Alabama

$3,511

$6,461

$6,485

$3,324

$1,455

Arkansas

$3,194

$5,995

$6,197

$3,240

$1,803

Arizona

$4,149

$6,967

$6,778

$3,575

$1,555

California

$4,232

$7,050

$6,578

$3,654

$1,596

Colorado

$4,004

$7,499

$7,439

$3,833

$1,514

Connecticut

$4,091

$8,179

$8,046

$3,716

$2,567

Dist. of Columbia

$5,486

$7,976

$7,393

$4,596

$2,814

Delaware

$4,147

$7,128

$7,144

$3,285

$1,608

Florida

$4,311

$7,047

$6,615

$3,639

$1,837

Georgia

$4,356

$7,517

$6,972

$3,540

$1,835

Hawaii

$4,386

$7,073

$7,355

$4,203

$1,657

Iowa

$2,367

$5,297

$6,163

$2,857

$935

Idaho

$3,477

$6,147

$6,332

$3,193

$928

Illinois

$3,641

$7,054

$7,040

$3,537

$1,556

Indiana

$3,137

$5,998

$6,174

$3,003

$1,402

Kansas

$3,187

$6,514

$6,930

$3,292

$1,421

Kentucky

$3,044

$5,727

$6,080

$3,082

$1,372

Louisiana

$3,679

$6,598

$6,561

$3,425

$1,971

Massachusetts

$3,481

$7,017

$7,022

$3,479

$1,882

Maryland

$4,341

$7,994

$7,458

$3,671

$1,749

Maine

$3,107

$6,054

$6,531

$3,375

$1,286

Michigan

$3,436

$6,049

$6,113

$2,971

$1,523

Minnesota

$3,025

$6,299

$6,898

$3,244

$1,338

Missouri

$3,265

$6,333

$6,757

$3,279

$1,346

Mississippi

$3,218

$5,634

$5,718

$3,043

$2,011

Montana

$3,285

$5,977

$6,868

$3,385

$1,506

North Carolina

$3,481

$6,566

$6,710

$3,397

$1,486

North Dakota

$2,141

$5,362

$6,646

$3,326

$1,467

Nebraska

$2,717

$5,909

$6,498

$3,136

$1,388

New Hampshire

$3,582

$7,140

$7,443

$3,519

$1,666

New Jersey

$4,126

$8,011

$7,882

$3,928

$2,241

New Mexico

$4,373

$6,906

$6,534

$3,532

$1,207

Nevada

$4,733

$6,993

$6,357

$3,700

$1,185

New York

$3,906

$7,127

$7,234

$3,986

$2,495

Ohio

$3,313

$6,383

$6,530

$3,135

$1,465

Oklahoma

$3,484

$6,789

$6,900

$3,493

$1,641

Oregon

$3,618

$6,502

$6,481

$3,245

$856

Pennsylvania

$3,282

$6,550

$7,059

$3,457

$1,545

Rhode Island

$3,524

$7,162

$7,313

$3,371

$1,786

South Carolina

$4,019

$6,537

$6,559

$3,281

$1,375

South Dakota

$2,584

$5,710

$6,900

$3,250

$1,531

Tennessee

$3,388

$6,309

$6,505

$3,308

$1,737

Texas

$4,350

$7,591

$7,119

$3,779

$1,945

Utah

$3,364

$6,411

$6,713

$3,070

$932

Virginia

$4,132

$7,956

$7,968

$3,985

$1,692

Vermont

$3,681

$6,197

$6,547

$3,297

$2,511

Washington

$3,947

$7,365

$7,190

$3,500

$1,355

Wisconsin

$2,740

$5,673

$6,289

$2,914

$992

West Virginia

$2,914

$5,573

$6,158

$3,238

$1,166

Wyoming

$3,523

$6,356

$6,889

$3,663

$1,442

Source:Federal Reserve Bank of New York/Equifax Consumer Credit Panel.

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