Average credit card debt in the U.S. in 2024

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Credit cards have become a staple in American wallets. According to Experian, about half a billion credit accounts exist in the U.S. The New York Federal Reserve reports that credit card balances reached $1.14 trillion in the first quarter of 2024, jumping $27 billion from the previous quarter.

Understanding average American credit card debt is crucial to understanding how it can relate to your and the country’s overall economic health.

Average credit card debt in the U.S.

Based on TransUnion’s latest Credit Industry Insights Report, Americans had an average of $6,329 in credit card debt as of quarter two of 2024, with 107.1 million consumers carrying a balance on their cards.

Credit card debt isn't staying still. It's growing at an 8.6% year-over-year rate. To put that in perspective, the average credit card debt was $4,828 in 2021. It's jumped by an average of $1,501 in just a few years.

Why the steady climb? Rising interest rates could be a key factor. In 2019, the average rate was 16.98%. By May 2024, it had soared to 22.76%. Even if you're spending the same amount, higher rates mean higher debt, especially if you're carrying balances month to month. As credit card balances increase, Americans could find it hard to make their current budget work.

Credit card debt by age

Your generation might influence how much credit card debt you carry. According to Experian's latest data, millennials and Generation X have seen the biggest jumps in credit card balances. Let's break it down:

Why the differences? Jennifer Hemphill, an accredited financial counselor and Director of Financial Empowerment at Empower Evergreen, points to life stages as a factor.

"Young adults in college are more likely building their credit, so they have lower credit limits and are usually only able to make smaller purchases," she explains. "Those who are more established or families with children tend to have higher spending needs and therefore carry higher balances."

States with the highest and lowest credit card debt

Your location might influence your credit card debt, too. Experian's latest data reveals some interesting state-by-state differences:

States with the highest credit card debt

States with the lowest credit card debt

What influences average credit card debt

Economic factors

Your income can significantly impact your credit card usage. Periods of unemployment might force you to rely on credit cards for daily necessities, potentially leading to higher debt.

The cost of living plays a role, too. Inflation can drive up prices for essentials like groceries and transportation. You might find your credit card balances creeping up even when you buy the same items.

Consumer behavior

Your spending habits and lifestyle choices directly affect your credit card debt. Frequent dining out or international vacations could lead to higher balances than home-cooked meals and domestic trips.

Financial literacy also plays a role. Common misconceptions, like believing carrying a balance improves your credit, can lead to unnecessary debt and interest payments.

Credit card rewards can also influence spending. Hemphill warns, "Credit card rewards can lead to someone spending more, especially ones that promise bonus rewards or points if you meet the requirements by a certain timeframe or offer higher earnings bonuses for certain categories. A consumer may not have been planning on spending more to receive or don't have a plan to pay off the balance immediately."

Credit industry practices

Your credit score plays a crucial role in determining your interest rates and fees. A lower credit score might result in a higher annual percentage rate (APR), meaning you could pay more interest even with the same balance as someone with a better credit score.

Your credit limit also affects your overall balance. A lower limit might restrict your spending, potentially keeping your debt lower.

How much debt is too much?

There's no one-size-fits-all answer to how much credit card debt is too much. It depends on your personal financial situation and what you can comfortably afford in monthly payments. Ideally, you should aim to pay off all or most of your balance each month to avoid interest charges.

Carrying too much debt can impact various aspects of your financial life:

1. It can hinder your ability to save and invest for future goals like retirement or a down payment.
2. It might affect your borrowing capacity for significant purchases like a home.
3. Financial stress from debt can affect your physical and mental health, leading to sleepless nights and constant worry.

Strategies for managing and reducing credit card debt

Tackling credit card debt takes time and effort, but it's achievable with the right strategies. Here are some approaches to consider:

Choose a debt repayment strategy

These two popular methods can help you systematically pay off your credit card debt:

• Debt snowball: Focus on paying off your smallest debt first while making minimum payments on others. Once you've paid off the smallest debt, apply that payment to the next smallest, and so on.
• Debt avalanche: First, target the debt with the highest interest rate while making minimum payments on others. Once that's paid off, move to the debt with the next highest rate.

Both strategies can be effective — choose the one that makes the most sense for your situation.

Consider debt consolidation

Debt consolidation involves taking out a loan to pay off your credit card balances. This approach leaves you with a single payment, potentially at a lower interest rate. It can simplify your debt payoff process and save you money on interest.

Creating a realistic plan

Take a close look at your spending habits and create a budget that allows you to meet your minimum payments and put extra towards debt payoff. This might mean temporarily cutting back on some expenses to prioritize debt reduction.

Work on responsible credit card usage

Paying down your debt is only part of the solution. To keep balances low in the future, focus on your spending behavior. While unexpected expenses can arise, having a plan can help prevent you from racking up more unnecessary debt.

The bottom line

Average credit card debt in America has been climbing steadily, with millennials and Gen X carrying the highest balances. However, your situation doesn't have to mirror the national average. By staying aware of your spending and keeping balances low, you can manage your credit cards responsibly.

Take time to review your credit card statements and understand your personal debt situation. If your balances are higher than you'd like, take action to bring them down.

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.