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Total U.S. credit card debt hit a record $870 billion at the end of last year, according to a recent report from the Federal Reserve Bank of New York.
The last time Americans held close to this much credit card debt, songs like T.I.’s “Whatever You Like” and Rihanna’s “Don’t Stop the Music” dominated the charts, the first “Twilight” movie was a blockbuster and Barack Obama had just been elected to his first term as president. It was the end of 2008 — the middle of the last recession.
Credit Card Debt
Not only do Americans now have more credit card debt than at any time in the past decade, the New York Fed’s report also shows an increasing number of credit card accounts that are at least 90 days behind on payments.
At the end of 2018, Americans’ total debt rose to $13.54 trillion, the highest level since the summer of 2008, according to the New York Fed’s report. By far, mortgages were the biggest chunk of this debt, at $9.12 trillion, followed by student loans at $1.46 trillion, and auto loans, at $1.27 trillion.
While credit cards are a relatively small portion of total overall debt, they are a particular concern for older Americans, with data showing that those 60 or older hold around 30% of the nation’s total credit card debt, according to the Fed data.
Credit Card Debt Reaches Record High In Us
Between the crippling student loan debt that millennials face and the high credit card debt burden on Baby Boomers, the Fed data clearly show that Americans are increasingly burdened by debt across all stages of life.
If the Fed’s report is inspiring you to get a better handle on your own finances, here are some tips to help you manage your credit card debt.
About the author: Paris Ward is a content strategist at Credit Karma, providing readers with the latest news that will aid their financial progress. She has more than a decade of experience as a writer and editor and holds a bachelor’s… Read more.
Average Us Credit Cards Debt Statistics
Credit Karma’s writers and editors adhere to firm editorial standards , which help to ensure we produce accurate news content for our readers. Our news team thoroughly sources and fact-checks every article we publish, and we strive to deliver a balanced analysis of current events. Prior to publication, all Credit Karma news content must meet the following standards:Credit cards have become about as American as apple pie, baseball, tipping culture and Kid Rock. In fact, 8 in 10 American adults (84%) have at least one credit card.
We’re breaking down what the average credit card debt in America looks like, what it means for you, and what to do if you’re trapped in credit card debt. Heads up: These stats aren’t pretty, but it’s important to know the facts. Let’s dive in!
The national credit card debt actually dropped in 2020 during the pandemic. That was when student loan relief paused federal student loan payments, which meant millions of borrowers suddenly had more money to put toward other debts. And many card holders used their stimulus checks to pay down their credit card balances during that time.
Maxed Out: Inside America's Credit Card Debt Crisis And What We Do Next
So, how does credit card debt spread out across individual Americans? Well, there are around 218 million American adults with at least one credit card, and 48% of those with a credit card carried a balance at least once in 2021.
Ramsey Solutions also found that 24% of Americans are relying on credit cards more than normal to pay their bills. And 14% of Americans said they would have to put a $400 emergency expense on a credit card and pay it off over time.
With so many people leaning more on credit cards to survive, it’s no wonder credit card debt is shooting up so fast!
Credit Card Debt Passes $1 Trillion. Here's A Payoff Playbook.
And that number will probably go up thanks to inflation and nationwide layoffs, as well as federal student loan payments starting back up sometime soon.
In fact, since the total credit card debt is higher than it was before the pandemic, the average credit card balance could get as high as $6, 870, which is what happened in 2019.
Do you know what happens when you carry a balance on your credit card from month to month? You get charged credit card interest. And right now, credit card interest rates are the highest they’ve
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If you were drinking a glass of water when you read that, you probably just did a spit take! In case you’re wondering, that’s 36% more than it was five years ago. And with federal interest rates increasing, that number isn’t likely to come down for a while.
Just like everything else in credit card world, credit card delinquencies are also on the rise. (By the way, Credit Card World is definitely the
Keep in mind, you can still have credit card debt even if you aren’t delinquent. Your credit card account becomes delinquent if your minimum payment is late by 30 days or more (the typical billing cycle). When that happens, you get slammed with late fees and penalty APR. Plus, credit card companies can report your delinquency to the main credit bureaus—which means it also shows up on your credit report.
Statute Of Limitations On Debt Collection By State
Miss enough payments in a row, and your credit card debt will go into collections. But while paying the minimum payment will keep you out of delinquency with the credit card company, you can still pile on credit card debt if you don’t pay off your
America’s got credit card debt from sea to shining sea. But just like each state has its own accent and food (taco seasoning on watermelon, anyone?), they also have their own credit card debt numbers. Here are the states that carry the highest credit card balances in the country.
Free. They’re just sneaky ways of getting you to charge more to your card. Because the more credit card companies can get people to use their cards, the less likely people are to pay them off and the more money lenders can charge. And any cash back you do manage to get comes at the expense of someone else. The credit card industry is straight-up predatory, folks!
American History Usa
Everyone loves to say you need a credit card to survive in this country, but the stats tell a different story. It’s pretty clear America’s relationship with credit cards is more toxic than Britney Spears’ 2003 hit song—and it’s literally titled “Toxic.”
The national credit card problem is only going to get worse if we keep swiping our cards like there’s no tomorrow. But the good news is, you don’t have to be part of these statistics! Here’s how to pay off your credit card debt once and for all.
Because that’s exactly what the credit card industry is: a game. Problem is, it’s rigged so the credit card company comes out on top while you get stuck paying the tab.
When Were Credit Cards Invented: The History Of Credit Cards
If you want to pay off credit card debt, you’ve got to chop it off at the root. That means literally cutting up your credit cards. Every. Single. One. They’re not doing you any favors. They’re only holding you back.
Live (and thrive) without credit cards! In fact, quitting the credit card game will actually free you up to make more progress with your money.
When you’re used to just charging your purchases on a credit card, it can be hard to actually keep track of your spending or know how much you have left for the month. But when you have a budget, you can know
Credit Card History: Timeline From The First Card To Now
Creating a monthly budget is a total game changer. Instead of worrying about your card being declined at the grocery store, you can feel confident that you have enough. Seriously, you need a budget if you ever want to get your spending (and your sanity) under control.
There are a lot of “methods” out there for paying off credit card debt. But most of them only move your debt around (yeah,
This method helps you prioritize your debts, gain quick wins, and attack your credit card
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