11 Credit Card Debt Statistics to Know

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It’s time to dive into the dynamic world of personal finance, where credit cards often play a starring role. The year 2023 has brought with it a fresh set of numbers and trends in the realm of credit card debt, and boy, are there some eye-opening stats to explore.

Whether you’re a financial aficionado or just someone who likes to stay in the know, we’ve got you covered.

So, please sit back, relax, and let’s take a casual stroll through the 11 Credit Card Debt Statistics To Know in 2023. After all, managing your money should be informative, engaging, and even a tad fun!

Credit Card Debt Statistics

Discover the nitty-gritty details of how much we owe and the trends shaping our credit card debt, as we delve into the statistics that keep us financially informed.

How Much Credit Card Debt Does the Average American Carry?

In the ever-evolving financial landscape of 2023, the typical American is juggling a credit card balance of about $5,910. That’s the scoop from the folks at Experian, who took a close look at the numbers in the third quarter of 2022. This figure marks a 13% uptick from the previous year and marks the first year-over-year increase since at least 2019. Let’s break it down over the past few years:

  • In 2019, the average credit card debt weighed in at $6,194.
  • In 2020, it took a slight dip, settling at $5,315.
  • 2021 saw a further decrease to $5,221.
  • But in 2022, wallets got a little heavier, with an average of $5,910 to pay off.

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The Bigger Picture: Total U.S. Credit Card Debt

The credit card debt landscape isn’t just about individual wallets—it’s also about the nation’s financial health. In the first quarter of 2023, the United States reached a record-breaking high of $1.03 trillion in credit card debt. That’s a massive number! But, it’s worth noting that credit card debt did a little financial dance during the pandemic before beginning a steady climb in 2021, all thanks to rising inflation. Here’s a peek at the journey over the last few years:

  • In 2013, during Q1, credit card debt was $0.66 trillion, making up 5.88% of the total consumer debt.
  • By 2017, during Q4, it had risen to $0.83 trillion, accounting for 6.31% of the total consumer debt.
  • The journey continued through the years, with credit card debt reaching $0.99 trillion in the first quarter of 2023, making up 5.78% of the total consumer debt.

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Credit Card Debt by State Statistics

The United States is a tapestry of diverse financial situations, and credit card debt varies significantly from state to state. In 2021, Alaskans found themselves shouldering the heaviest debt burden, with an average credit card balance of $7,338.

In contrast, Wisconsinites and Iowans were the thriftiest, with the smallest average balances of $4,808 and $4,811, respectively.

Here’s a closer look at the credit card debt scene, state by state:

State Wise Data – Summarised

  • The state with the highest average credit card debt is Alaska, where residents carried an average of $7,338 in credit card debt.
  • The lowest average credit card debt can be found in Iowa, where the average balance was just $4,811.
  • On the national level, the average credit card debt in the United States varies significantly, with states like California, Texas, and New York having relatively high average balances, while states such as Iowa and Wisconsin have notably lower balances.

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States with the Highest Credit Card Debt

  • Alaska: Alaskans have been carrying the heaviest credit card debt load for some time, with an average of $7,338.
  • Washington, D.C.: The nation’s capital follows closely behind, with residents holding an average debt of $6,904.
  • Connecticut: Nutmeg State folks are pretty close, with an average debt of $6,825.
  • New Jersey and Maryland: These states round out the top five with average debts of $6,819 and $6,668, respectively.

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States with the Lowest Credit Card Debt

  • Wisconsin and Iowa: Wisconsinites and Iowans have consistently proven to be the thriftiest, maintaining the lowest average credit card debt for at least two years straight, with averages of $4,808 and $4,811, respectively.
  • Kentucky, Mississippi, and West Virginia: These states join the list of the top five states with the least average credit card debt, highlighting the prudent financial habits of their residents.

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Credit Utilization Rate Statistics

Unearth the secrets behind credit utilization rates, a key factor in your credit score, and find out how it’s evolved in recent years.

Managing Your Credit: The Credit Utilization Rate

Your credit utilization rate, often referred to as the credit utilization ratio, is a key metric to gauge your financial health. It’s a simple concept: divide your credit card balances by your credit limits.

For example, if you’ve got a $1,000 balance on a credit card with a $10,000 limit, your credit utilization would be 10%.

As of 2022, the average credit utilization rate across the nation was at 28%. This represents a 2.5% increase from the previous year, highlighting a slight uptick in credit card balances nationwide. Here’s a quick look at the numbers over the past few years:

  • In 2020, the average credit utilization rate stood at 25.3%.
  • The following year, in 2021, it crept up a bit to 25.6%.
  • By 2022, it had reached 28.00%.

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Credit Card Interest Rates Statistics

Take a deep dive into the world of credit card APRs, tracking their rise and understanding how they impact your pocketbook.

The Cost of Borrowing: Average Credit Card Interest Rates

As of the first quarter of 2023, the average annual percentage rate (APR) on credit cards with interest charges was a staggering 20.92%. That’s quite a climb from 2021 when it was 15.91%.

These interest-bearing accounts represent those credit cards that charge interest, excluding the ones with a 0% introductory APR, which will only come into play once that introductory period ends.

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Tracking Delinquent Cards: Credit Card Delinquency Rates

Credit card delinquency rates haven’t reached worrying territory just yet. This is a critical point because it’s when it can be recorded on the cardholder’s credit report, causing damage to the credit score and incurring financial penalties.

The situation can get even more serious as cards reach the 60- and 90-days-past-due marks.

30–59 days past due:

  • In 2021: 1.04%
  • In 2022: 1.67%

60–89 days past due:

  • In 2021: 0.58%
  • In 2022: 1.01%

90 days or more past due:

  • In 2021: 0.34%
  • In 2022: 0.63%

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Credit Card Debt by Income Statistics

How does your income influence your credit card debt? Let’s break down the numbers to see how different income brackets stack up.

Credit Card Debt and Income: What the Numbers Reveal

Your financial status, including your income, can significantly influence how much credit card debt you’re likely to carry. Here’s the scoop on how income and credit card debt are connected:

Less than 20th Income Percentile: For those earning less than $16,290 annually, their median credit card debt hovers around $3,830. About 30.5% of this group carries credit card debt, which is less than a third.

20th to 39th Income Percentile: If you find yourself in the $16,290 to $35,630 income bracket, the median credit card debt rises slightly to $4,650. A higher percentage, 45.6%, in this category carries credit card debt.

40th to 59th Income Percentile: In the $35,630 to $59,050 income range, you’ll encounter a median credit card debt of $4,910. A solid 55% of individuals in this bracket have credit card debt.

60th to 79th Income Percentile: The middle class and the upper-middle class, with a median income of $95,700, carry an average credit card debt of $6,990. A significant 56.8% of individuals in this category have credit card debt.

80th to 89th Income Percentile: For those earning around $151,700, the average credit card debt is $9,780. About 45.9% in this income range have credit card debt.

90th to 100th Income Percentile: The highest earners, with a median income of $290,160, carry an average credit card debt of $12,600. While this group has the highest income, they are also the least likely to have credit card debt, with only 32.2% carrying balances.

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Credit Card Debt by Race Statistics

Explore how racial and ethnic backgrounds intersect with credit card debt, revealing fascinating disparities and financial dynamics.

Credit Card Debt across Racial Groups

The financial landscape isn’t one-size-fits-all, and that’s certainly evident when you break down credit card debt by race. Here’s what the numbers tell us:

White, Non-Hispanic Americans: On average, this group carries the highest credit card debt, with a median of $6,940. They’re leading the way in the credit card debt game.

Black, Non-Hispanic Americans: Black Americans, on the other hand, have the lowest average credit card debt, clocking in at $3,940. They’re the thriftiest when it comes to credit card balances.

Hispanic Americans: Hispanic Americans fall right in between these two groups, with an average credit card debt of $5,510. They’re striking a balance when it comes to managing their credit card debt.

Other: The “Other” racial group category carries an average credit card debt of $6,320.

All Families: When you look at the bigger picture and take into account all racial groups, the average credit card debt for all families across the board is $6,270.

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Credit Card Debt by Age Statistics

From Generation Z to the Silent Generation, get a snapshot of how different age groups manage their credit card debt and the factors that influence their financial choices.

Credit Card Debt across Generations

Your age can play a big role in shaping your financial habits, and that’s especially true when it comes to credit card debt. Let’s take a look at how different generations stack up:

Generation Z: Young adults from Generation Z are on the lower end of the spectrum with an average credit card debt of $2,312. Their lower incomes, on average, are complemented by lower credit limits, which might be helping them steer clear of accumulating credit card debt.

Millennials: The millennial generation carries an average credit card debt of $4,569. As they navigate the financial landscape, they’re not carrying the lightest load but are still managing their credit reasonably well.

Generation X: Generation X leads the way when it comes to credit card debt, with an average balance of $7,236. They’re the top dogs in the credit card debt game, holding the highest balances.

Baby Boomers: Baby boomers are right behind Generation X with an average credit card debt of $6,230. They’ve got their own fair share of credit card balances to handle.

Silent Generation: The silent generation rounds out the list with an average credit card debt of $3,821. They’re managing their credit responsibly and maintaining relatively lower balances.

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Conclusion

And there you have it, folks! Our journey through the 11 Credit Card Debt Statistics to Know in 2023 has given us a glimpse into how Americans are navigating the financial landscape.

From the average credit card debt to the factors shaping our credit utilization and delinquency rates, it’s clear that money matters are evolving.

So, as we continue on this financial adventure, remember that knowledge is your best ally in the quest for smart money management. Until next time, keep those wallets light and those savings tight!

Frequently Asked Questions

1. Why do Generation X individuals have the highest credit card debt?

Generation X carries the highest average credit card balance at $7,236, likely due to various financial responsibilities, such as mortgages and supporting both children and aging parents.

2. Why does Generation Z have the lowest credit card debt?

Generation Z’s average credit card debt is $2,312, reflecting their lower income and credit limits, which act as a safeguard against accumulating significant credit card debt.

3. What’s the link between income and credit card debt by race?

The link between income and credit card debt varies significantly among different racial groups. White, non-Hispanic Americans tend to carry the highest credit card debt, while Black, non-Hispanic Americans hold the lowest balances.

4. Why have credit card interest rates risen since 2023?

Credit card interest rates have risen since 2023 primarily due to the actions of the Federal Reserve. The Federal Reserve has been gradually raising interest rates in response to various economic factors, such as inflation concerns and economic recovery efforts.

This means that consumers end up paying more in interest when they carry a balance on their credit cards. So, those rate hikes directly impact the cost of borrowing via credit cards, resulting in the increase in average APRs in 2023.

5. Why is the average credit utilization rate important for credit scores?

The average credit utilization rate, which stood at 28% in 2022, is a critical factor affecting credit scores.

Lower credit utilization rates are better for credit scores, and experts recommend keeping it below 30% to maintain good credit health. High utilization can negatively impact credit scores.