What does the average Joe owe on his credit cards?
That would be $3,600.
Or $7,743. Or $5,234. Or $1,098.
When it comes to credit card debt, that average Joe is one
All of the numbers above are from impeccable sources
defining "average credit card debt" for Americans. As you can
see, the numbers vary greatly, so depending on how debt is
measured, we're either doing pretty well when it comes to managing
our credit cards, or horribly.
"You think these things are simple, but they're more subtle and
complex than you imagine," said Ezra Becker, vice president of
research and consulting at TransUnion's financial services unit.
His firm came up with the $5,234 number, which includes actual
amounts spent and reported to the giant credit bureau, but excludes
unused cards and store cards.
The hunt for average
The complications stem from different ways of defining credit
cards, different ways of counting the card-carrying population, and
the different ways people use their cards. Finding the typical
balance is like the parable of the blind men identifying an
elephant from the shape of its parts -- each observation is part of
a larger truth.
The Federal Reserve, which runs the national banking system, is
a natural place to start looking for the average credit card
balance. The Fed's monthly G.19 Consumer Credit report -- drawn
from banks' lending reports -- shows revolving debt of $880 billion
in July 2014. Divided by the U.S. Census Bureau's estimate of the
U.S. adult population in 2013 of about 242.5 million people, that
comes to just over $3,600 each.
However, the revolving debt category includes bank loans and
finance company loans other than credit cards, and many people over
18 do not have a credit card. Adjusting for the fraction of adults
who do not have a card, the per person balance is about $5,121.
The Federal Reserve Bank of New York tries for a more precise
look at credit card debt by excluding other types of revolving
debt. The average credit card balance in the U.S. was $1,648 per
account in the second quarter of 2014, according to its
What to leave out
A few asterisks follow those digits. In its population measure, the
New York Fed includes people who have both a credit report and a
Social Security number. That means some noncitizen residents who
lack Social Security numbers are left out.
TransUnion's estimate of average card debt per borrower, at
$5,234 during the second quarter, is fairly close to the Federal
Reserve's G.19 figure. The credit bureau omits cards that have gone
unused for long periods, and cards that can be used only at a
specific store or gas station. These contribute relatively little
to the total balance, Becker said, while they inflate the
"There are people out there that might not use their card," he
said. "I'm diluting that average balance by including a bunch of
Another snag stems from the different ways people use cards.
Card issuers divide the world into two groups: "transactors" who
use their card for purchases and pay off the balance each month;
and "revolvers" who borrow on their card, paying interest charges
month to month. To pure transactors, the balances on their cards
aren't really debts at all, since any purchases will be paid off
before interest charges are applied.
To get a more focused picture of card debt, CreditCards.com
asked Experian to run an analysis separating the transactors from
the revolvers. Credit bureaus, with their detailed records on
roughly 200 million U.S. consumers, provide a rich trove of
information for researchers. Even the New York Fed, which can tap
data directly from the banking system, uses anonymized credit
bureau files for its quarterly analysis of consumer debt.
As of June 2014, the average balance on a card that usually
carries a balance was $7,743, Experian found. For cards used just
to make purchases -- and perhaps also rack up airline miles or cash
back -- the average monthly balance was much lower, at $1,098.
Shopping for rates
The drawback: These figures look at accounts, not individuals. The
same person may have several cards, with different payment
behaviors on different ones. So dividing cards into transactor and
revolver camps is possible, but the people who use the cards do not
fall neatly into those categories.
The same person "may have $10,000 on a zero-rate balance
transfer card, and make purchases on a high-rate card they're
careful to pay off," said Michele Raneri, Experian vice
president for analytics. They might even have a relatively low, 7
percent interest card for short-term borrowing, such as paying for
a vacation, she added.
As if looking for individual card debt weren't difficult enough,
it is only part of the picture. Many of us think of our finances as
part of a larger unit; the family or household. Then the question
becomes, what does the average family owe on their cards?
The question leads back to the Federal Reserve, which produces a
widely quoted study, the Survey of Consumer Finances. Every three
years the study interviews a sample of 5,000 households or more,
probing information about family budgets that is available nowhere
else. The Fed released
household credit card debt data
from the survey Sept. 4, 2014.
The family unit
For 2013, the survey found that the average card debt was $5,700
for households that carry a balance --38 percent of all households.
The family at the midpoint of the range had a balance of just
$2,300, indicating that the average is skewed toward the high end
by families that carry large balances.
However, the survey figures do not match up with the total
credit card debt. In fact, households admit to having only about 60
percent of the card debt that credit report data shows, a team of
economists from the New York Fed found, after looking at surveys
from 2001 through 2007.
"[W]e find a substantial gap in credit card debt reporting,"
said the economists in their 2011 report, "
Do we know what we owe? A comparison of borrower-
and lender-reported debt
." In the survey, the person interviewed might not have a full
grasp of the cards being used by everyone in the family, the
Debts higher for those seeking financial help
Leaving aside the hunt for average Joe, there are groups that have
their own experience with card debt that can be useful to know.
People seeking credit counseling in 2013 -- meaning they had hit
financial difficulties -- had nearly six cards, on average, and
unsecured debt of $17,548, according to the National Foundation for
Credit Counseling, based on the experience of its member agencies.
For this group, unsecured debt amounted to 50 percent of their
average annual income. Unsecured debt is chiefly credit card debt,
plus payday loans and other debts not backed by property.
For people entering Chapter 7 bankruptcy, the average card debt
was $17,700 back in 2000 to 2002, according to a study by the
Executive Office for U.S. Trustees. That would be about $23,300 in
today's dollars, according to inflation figures housed by the St.
Looking for the average card debt means making some choices. "It
depends on your philosophic approach to what you're measuring,"
Becker of TransUnion said, "and what you're trying to do with
: Experian, based on June, 2014 sample of credit reports looking at
24 months of payment history; Federal Reserve Bank of New York,
based on analysis of Equifax credit reports, second quarter, 2014;
Federal Reserve G.19 Consumer Credit Report, June 2014, and U.S.
Census population estimate, 2013; TransUnion; based on credit
report sample from secpmd quarter 2014, excluding unused cards and
store cards; Federal Reserve G.19 Consumer Credit Report, June
2014, and U.S. Census estimate of card users, 2012; Federal Reserve
Survey of Consumer Finances, for 2013; Experian again.
Credit card statistics, industry facts