Credit card debt statistics

Comment

Shutterstock photo

Credit-card-statistics-road-map

Americans have created billions of dollars worth of debt over the past 45 years, and credit card debt has been an important part of that. Credit card debt dove -- along with consumer spending -- during the 2008 financial crisis and slow growth has kept total revolving debt at pre-crisis levels, though it is creeping up. According to figures from the Federal Reserve, total U.S. outstanding consumer debt was $3.34 trillion as of February 2015. 1 That figure includes car loans, student loans and revolving debt, but not mortgages. Total U.S. outstanding revolving debt, which is chiefly made up of credit card balances, was $884.8 billion as of January 2015. 1

-

Average credit card debt

Just how much credit card debt belongs to the average American depends on how you define credit cards and count the card-carrying population. In search of one number that answers that question, CreditCards.com turned to several reliable sources and came up with multiple credible numbers. (For more information, see " Average credit card debt statistics .")

  • $1,098 per card that doesn't carry a balance 2
  • $1,648 per account, U.S. adults with a credit report and Social Security number 3
  • $3,600 per person, U.S. resident adults 4
  • $5,234 per person, excluding unused cards and store cards 12
  • $5,596 per U.S. adult with a credit card 5
  • $5,700 per household with credit card debt 6
  • $7,743 per card that usually carries a balance 2

The amount of average credit card debt has been steadily increasing over the long term. A person born between 1980 and 1984 has on average $5,689 more in credit card debt than his or her parents (those born between 1950 and 1954) at the same stage of life and $8,156 more in credit card debt than his or her grandparents (those born between 1920 and 1924). 7

But the Great Recession reversed the growth trend -- at least for a few years. According to TransUnion, between the first quarters of 2008 and 2014, average credit card debt per borrower fell from a high of $6,276 in mid-2008 to $5,164 in Q1 of 2014 -- the lowest point in the six-year period. 8 Average credit card debt per borrower began to creep up again in Q2 2014, reaching $5,234.

Transactors versus revolvers

Card issuers divide the world into two groups: "transactors" who use their cards for purchases and pay off the balances each month; and "revolvers" who carry balances on their cards, 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.

The number of revolvers has been decreasing steadily since 2009, when the National Foundation for Credit Counseling first began surveying Americans about the issue. In 2014, only about one in three U.S. adults say their household carries credit card debt from month to month, down from 44 percent in 2009. Some 15 percent of adults -- more than 35 million people -- roll over $2,500 or more in credit card debt each month. 10

Credit-card-statistics-road-map FUN FACT:
In a March 2013 poll, 85 percent of respondents said they were unlikely or somewhat unlikely to talk with a stranger about credit card debt -- a subject more taboo than religion, politics, salary and love life details. 11

Students and credit card debt

The Credit CARD Act put the brakes on credit card use by college students. Among other provisions, it bans credit card approvals for anyone under 21 years old unless they have an adult co-signer or can prove they have sufficient income to pay the bills. More than twice as many college students in 2013 used debit cards (77 percent) as used credit cards, according to a survey by student loan provider Sallie Mae. Still, students do manage to rack up credit card debt. The average balance among college students in 2013 was $499 and the median was $136. 13

By grade level, sophomores carry the lowest average balance and freshmen and seniors carry the highest. But median balances more predictably rise by grade level. 13

Average balances also vary depending on the type of school the student attends and the region. The average credit card balance of students attending four-year private colleges in 2013 was $737, compared to $441 for students attending four-year public colleges and $409 for students attending two-year public colleges.

The average credit card balance of students living in the Midwest was $743, higher than those in the South ($494), Northeast ($434) and West ($350). 13

Small business credit card debt

Half of small businesses are transactors, according to a May 2012 survey by the National Small Business Association. Among its findings:

  • 50 percent of small business owners said they paid off the balance on their business credit cards every month;
  • 26 percent said they carried a balance of less than $10,000;
  • 15 percent said they carried a balance of $10,000 to $25,000;
  • 9 percent said they carried more than $50,000. 14

small business credit card debt

Low- and middle-income families

According to research by the public policy organization Demos, credit cards are often a financial safety net for low- and middle-income households - those whose incomes are between 50 and 120 percent of the local median income. Among those carrying credit card balances for more than three months, 40 percent used the cards for basic necessities such as food, housing and utilities because they did not have enough money in their bank accounts.

Still, in 2012, the average credit card debt among low- and middle-income households carrying credit card debt totaled $7,145, down from $9,887 in 2008.

In a March 2012 survey, Demos looked at the differences between low- and middle-income families who had credit card debt, and those who didn't. Among its findings:

  • Households in which a member lacked health insurance in the three years before March 2012 were 20 percent more likely to carry credit card debt than households where no one had been uninsured;
  • Those in which someone had been unemployed for two months or more in the three years before March 2012 were 14 percent more likely to carry credit card debt than households where no one was unemployed;
  • Those with children under 18 years of age were 15 percent more likely to carry credit card debt than households with no children;
  • Those without credit card debt reported having savings nearly three times greater than average households with credit card debt;
  • Homeowners with negative equity were 24 percent more likely to carry credit card debt than those without negative equity in their homes.
  • Respondents with a college degree were 22 percent less likely to carry credit card debt than high school graduates;
  • Yet 71 percent of households in debt who paid college expenses for themselves or their spouse between February 2009 and February 2012 said those expenses contributed to credit card debt. 15

 Sources and calculations

  1. Federal Reserve's G.19 report on consumer credit released April 7, 2015
  2. Experian; based on a June 2014 sample of credit reports looking at 24 months of payment history
  3. Federal Reserve Bank of New York, based on analysis of Equifax credit reports, second quarter 2014
  4. Federal Reserve's G.19 report on consumer credit released Sept. 8, 2014 and U.S. Census population estimate 2013
  5. TransUnion; based on credit report sample from Q2 2014 ; excluding unused cards and store cards
  6. Federal Reserve Survey of Consumer Finances for 2013
  7. " New Evidence on Credit Card Borrowing and Repayment Patterns ," published in Economic Inquiry, January 2013
  8. TransUnion Industry Insights Report, Q1 2014
  9. TransUnion press release Aug. 14, 2012
  10. 2014 Consumer Financial Literacy Survey by the National Foundation for Credit Counseling
  11. CreditCards.com poll, conducted March 2013
  12. Federal Reserve's G.19 report on consumer credit released Sept. 8, 2014 and U.S. Census estimate of card users, 2013
  13. Sallie Mae's 2013 report, "How America Pays for College"
  14. National Small Business Association survey conducted May 2012
  15. Demos survey on credit card debt of low- and middle-income households conducted in February and March 2012


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Credit and Debt


More from CreditCards.com







CreditCards.com
Contributor:

CreditCards.com

Credit Cards
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com