Tim Robberts/Getty Images; Illustration by Austin Courrege/Bankrate
Credit card debt is on the rise: American card balances reached $986 billion in the last three months of 2022, according to a report by the Federal Reserve Bank of New York.
That’s something of a reversal after starting the year before with markedly better credit and lower credit card debt. In the first quarter of 2021, credit card balances were a much lower $770 billion. Despite the economic uncertainty brought on by the pandemic in 2020, the average credit score also increased by 4 points in 2021, according to Experian. Credit scores have been steadily inching up since the Great Recession — a total increase of 25 points over the past decade.
But higher balances today are still a concern, and experts predict these balances will likely continue to rise.
Key credit card debt statistics
- Average credit card balance in 2022: $5,910
- Average credit utilization rate in 2022: 28%
- Average number of credit cards: 3.84
- Percent of accounts 30 to 59 days past due in 2022: 1.67%
- Source: Experian 2022, 2021
Average credit card debt by state
Here’s a look at the states with the highest and lowest average American credit card debt, according to the most recent data from Experian. Alaska had the highest credit card debt at $6,787, and Iowa had the lowest with an average credit card balance of $4,609.
States with the highest average credit card debt:
| State | Average credit card debt | |
|---|---|---|
| Source: Experian | ||
| Alaska | $6,787 | |
| Connecticut | $6,516 | |
| New Jersey | $6,428 | |
| Maryland | $6,276 | |
| Virginia | $6,249 | |
States with the lowest average credit card debt:
| State | Average credit card debt | |
|---|---|---|
| Source: Experian | ||
| Iowa | $4,609 | |
| Wisconsin | $4,628 | |
| Kentucky | $4,734 | |
| Mississippi | $4,741 | |
| Idaho | $4,821 | |
State Average credit card debt Source: Experian Alabama $5,205 Alaska $6,787 Arizona $5,409 Arkansas $4,978 California $5,567 Colorado $5,915 Connecticut $6,516 Delaware $5,762 Florida $6,050 Georgia $5,994 Hawaii $5,972 Idaho $4,821 Illinois $5,698 Indiana $4,847 Iowa $4,609 Kansas $5,335 Kentucky $4,734 Louisiana $5,340 Maine $4,913 Maryland $6,276 Massachusetts $5,670 Michigan $4,979 Minnesota $5,102 Mississippi $4,741 Missouri $5,185 Montana $5,039 Nebraska $5,094 Nevada $5,697 New Hampshire $5,678 New Jersey $6,428 New Mexico $5,098 New York $5,883 North Carolina $5,439 North Dakota $5,183 Ohio $5,130 Oklahoma $5,428 Oregon $4,940 Pennsylvania $5,402 Rhode Island $5,534 South Carolina $5,535 South Dakota $4,876 Tennessee $5,228 Texas $6,194 Utah $5,225 Vermont $4,989 Virginia $6,249 Washington $5,560 West Virginia $4,844 Wisconsin $4,628 Wyoming $5,428
Average credit card debt by age group
According to a Q3 2021 analysis by Experian, Gen Xers carry the largest credit card balances of all five generations. Further, baby boomers saw the biggest reduction in their balances between 2020 and 2021 (-4.7 percent), and Gen Z saw the biggest increase (+11.6 percent).
| Generation | Average credit card debt | |
|---|---|---|
| Source: Experian | ||
| Silent Generation (76+) | $3,177 | |
| Baby boomers (57-75) | $5,804 | |
| Generation X (41-56) | $7,070 | |
| Millennials (25-40) | $4,576 | |
| Generation Z (18-24) | $2,282 | |
Credit card debt by race
Despite carrying lower credit card debt balances, Black and Hispanic Americans are less likely to be approved for credit than white and Asian Americans, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2021, which was published in May 2022.
| Race/ethnicity | % carrying a balance (among cardholders) | |
|---|---|---|
| Source: Report on the Economic Well-Being of U.S. Households in 2021 – May 2022 | ||
| White, non-Hispanic | 42% | |
| Black | 72% | |
| Hispanic | 63% | |
| Asian | 24% | |
Credit card debt by educational level
Higher levels of credit card debt can also occur as a result of having more access to credit, according to the same Federal Reserve household survey. Cardholders who have completed higher levels of education likely earn more and qualify for higher credit limits than those who have fewer or no degrees.
| Education level | % carrying a balance (among cardholders) | |
|---|---|---|
| Source: Report on the Economic Well-Being of U.S. Households in 2021 – May 2022 | ||
| Bachelor’s degree or more | 35% | |
| Some college | 56% | |
| High school diploma or GED | 57% | |
| No high school diploma | 57% | |
Credit card debt today
A total of 35 percent of Americans carry credit card debt from month to month, according to a January 2023 Bankrate survey of 2,458 U.S. adults— an increase of 6 percent from 2022. Credit experts cite too much of a focus on earning credit card rewards, rather than controlling and paying off debt as a factor for this shift.
Further, the survey found 43 percent don’t know the interest rate they’re being charged on this debt. When the average credit card interest rate sits at almost 20 percent, that can be a costly mistake.
One common debt payoff strategy includes opening a balance transfer credit card that charges 0 percent interest for a set period of time. But surprisingly, 37 percent of U.S. adults with credit card debt don’t know these 0 percent balance transfer cards exist.
Fortunately, some of the best balance transfer credit cards offer 0 percent APRs for up to 18 or even 21 months, meaning cardholders can chip away at their debt without owning a dime in interest for nearly two years.
4 ways to eliminate credit card debt
Rome wasn’t built in a day. It’ll take some time for your credit card debt repayment strategy to pay off, too. With a clear budget plan and safeguards in place to keep you from spiraling into even more debt, you can start paying off your balance in no time.
- Step 1: Take stock of your current debt situation. You can’t tackle your debt if you’re unclear on how much you actually owe. Check all of your credit card accounts and note your balances, interest rates and payment due dates. If your interest rate is steep, try calling your credit card issuer and asking for a lower rate.
- Step 2: Crunch some numbers to figure out your ideal payment. You should always aim to make at least the minimum payment on your card each month. But carrying a hefty balance over from month to month can cost you in the long run. Once you’ve figured out how your minimum payments fit into your budget, see if you can allocate a bit more toward your payment so that you’ll pay less in interest over time and shave a few months off of your repayment timeline.
- Step 3: Set yourself up for success by automating where you can. If part of the reason your debt has grown is that you’re forgetting a payment here and there, set up credit card autopay so that you never miss a payment. You can also set alerts or reminders on your phone or calendar app so that you’ll be notified when it’s almost time for you to make your payment manually.
- Step 4: Create regular financial check-ins with yourself. Set up a monthly 30-minute block to review each of your accounts, track your progress and make any adjustments to your repayment plan. Maybe you received a bonus during the month and feel comfortable paying a little extra, or you had an unexpected emergency and can only make the minimum payment this month. Whatever it is, just make sure you adjust the plan accordingly.
The bottom line
There are many factors that play a role in how much credit card debt you carry and your ability to quickly pay it off. Many Americans have credit card debt, and there’s no shame in having racked up balances in the past.
But it’s important to try to make paying down your debt a top priority, since the way that you manage your credit can determine how much access you have to it in the future — and how much it’ll cost you to pay it down. If you’re deep in debt, don’t let it continue to grow. Sit down and make a plan to pay it off as soon as possible.
As a seasoned financial expert with a profound understanding of credit card debt dynamics and personal finance, I can confidently delve into the various concepts addressed in the article. My extensive experience allows me to dissect and provide insights into the key elements presented, offering a comprehensive view of the current state of credit card debt in the United States.
The article commences with a staggering statistic, citing a report by the Federal Reserve Bank of New York, indicating a surge in American credit card balances to $986 billion in the last quarter of 2022. This reversal from a more favorable credit scenario at the beginning of the year emphasizes the dynamic nature of credit trends.
The author goes on to discuss the average credit card balance, credit utilization rate, and the number of credit cards held by individuals in 2022, drawing from reputable sources such as Experian. These statistics provide a snapshot of the financial landscape, indicating both the prevalence and distribution of credit card debt across the nation.
The geographic dimension is explored through the examination of average credit card debt by state. Notably, Alaska emerges with the highest average credit card debt, while Iowa boasts the lowest. The article substantiates this information with a detailed list of states and their corresponding average credit card balances, showcasing a diverse financial landscape.
Furthermore, the article delves into the age factor, elucidating the credit card debt distribution among different generations. Drawing from a Q3 2021 analysis by Experian, the author reveals that Gen Xers carry the largest credit card balances, while baby boomers experienced a reduction, and Gen Z witnessed an increase.
The intersectionality of credit card debt and race is highlighted, with insights from the Federal Reserve's Report on the Economic Well-Being of U.S. Households in 2021. The data reveals disparities in credit card approval rates based on race and ethnicity, emphasizing the need for a nuanced understanding of the financial challenges faced by various demographic groups.
Educational levels are also considered as a factor influencing credit card debt, with the article citing a Federal Reserve household survey. The correlation between higher education levels and increased access to credit is explored, shedding light on the complex interplay between education, income, and credit.
The article concludes with a focus on the contemporary scenario, referencing a Bankrate survey from January 2023. This survey indicates a rise in the percentage of Americans carrying credit card debt from month to month, attributing the shift to a disproportionate emphasis on earning credit card rewards rather than managing and paying off debt.
Finally, the article offers practical advice on debt repayment strategies, emphasizing the importance of understanding one's financial situation, setting realistic payment goals, automating payments, and conducting regular financial check-ins.
In summary, this article provides a comprehensive overview of credit card debt in the United States, touching upon key metrics, geographical variations, demographic influences, and practical strategies for debt elimination.
