Has credit card debt hit $1 trillion dollars?
Americans now owe a collective $1.13 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York. Credit card balances increased by $50 billion, or roughly 5%, in the fourth quarter of 2023, the New York Fed found.
Americans' credit card balances climbed to a new record high $1.13 trillion, according to data released Tuesday by the Federal Reserve Bank of New York. Credit card debt increased by $50 billion in the fourth quarter of 2023 alone, a 4.6% jump from the previous quarter.
U.S. credit card debt. The higher cost of everything from housing to high-tops to haircuts are a major culprit. Although inflation has moderated since it peaked in June 2022, Americans—particularly lower-income families—are relying more on credit cards to cope with the sticker shock.
Americans have accumulated a record-breaking $1 trillion in credit card debt. This comes as the Federal Reserve's interest rate hikes have caused average interest rates for credit cards to spike to more than 22%. Rates on retail credit cards are even higher, nearing 29% on average.
Our $1.13 trillion in credit card debt is shattering lives. Everyday borrowers share how they're navigating the uniquely American debt machine.
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.
Average American Credit Card Debt
However, according to Transunion, this figure rose from $5,795 in January 2023 to $6,295 in January 2024. The average credit card interest rate on accounts with balances that assessed interest was 22.75% in November 2023, according to the Federal Reserve.
Philly Fed researchers found that 3.19% of credit card balances were 30 days late (up from 2.76% the quarter before); that 2.21% of balances were 60+ days delinquent (up from 1.91%); and that 1.52% were in serious delinquency of 90 days or more (up from 1.32%).
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.
Total household debt rose by $212 billion to reach $17.5 trillion in the fourth quarter of 2023, according to the latest Quarterly Report on Household Debt and Credit. Credit card balances increased by $50 billion to $1.13 trillion over the quarter, while mortgage balances rose by $112 billion to $12.25 trillion.
Do billionaires use credit cards or debit cards?
What Credit Card Do the Super Rich Use? The super rich use a variety of different credit cards, many of which have strict requirements to obtain, such as invitation only or a high minimum net worth. Such cards include the American Express Centurion (Black Card) and the JP Morgan Chase Reserve.
| Debt type | Average balance (2023, Q3) | Total Balance (2023, Q4) |
|---|---|---|
| Mortgage debt (Excluding HELOCs) | $244,498 | $12.25 trillion |
| HELOCs | $42,139 | $360 billion |
| Auto loan | $23,792 | $1.61 trillion |
| Credit card debt | $6,501 | $1.13 trillion |
If you have credit card debt, you're not alone. On average, Americans carry $6,194 in credit card debt, according to the 2019 Experian Consumer Credit Review. And Alaskans have the highest credit card balance, on average $8,026.
The average American household owes $7,951 in credit card debt a year, according to 2022 data from the Federal Reserve Bank of New York and the U.S. Census Bureau.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
Total credit card debt in the U.S.
Debt holders say they put around $363 per month toward their credit card debt in 2023, slightly less than the $430 they paid monthly in 2022.
The average American in 2023 carried $21,800 in personal debt (excluding mortgages), a whopping $8,000 less than what Northwestern Mutual recorded in 2019.
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.
Average revolving credit card balance: $6,501
That's up from $5,910 in 2022. Based on data from the previous quarter, Gen X carries the highest average credit card balance, $8,870, while Gen Z carries the lowest average credit card balance, with $3,148.
How many credit cards does the average American own?
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.
Average American credit card debt by age
Gen X, ages 42-57, had the highest average credit card debt, at $8,134.
The personal finance firm found that 49% of credit card users carry a balance from one month to the next. That's up a full 10 percentage points from 2021. Of those who revolve their balances, 58% — 56 million people — have been in debt for at least one year, according to Bankrate.
People Are Falling Behind on Credit Card Bills and Auto Loans at an Alarming Rate. The rates of Americans behind on auto loan and credit card bills continue to rise — in fact, both are at the highest levels in more than 10 years. Rising delinquencies indicate that more people are in financial distress.
Since that point, the monthly delinquency rate and average credit card balance has been on the rise, aside from slight drops each spring due to income tax returns. Overall credit card delinquencies for January 2024 were 2.67%. We also see that delinquency rates lower as age demographics get higher.
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