Average U.S. Credit Card Debt Statistics
Is Your Credit Card Debt Higher Than Average?
The average credit card debt per U.S. household was $8,500 in Oct. 2019. That's $1.088 trillion in total credit card debt divided by 128 million U.S. households. It's 8.8% higher than in September, according to the Federal Reserve's G-19 report. It exceeds the pre-recession record of $1.02 trillion reached in 2008.
There are 253 million credit card-holding adults. Their average credit card debt is $4,202 each. But, if you're comparing your credit card debt to the average American, that's a little low. According to Credit Cards.com, the credit card debt per card-carrying adult is $5,839.
Of course, some people pay off their credit cards every month. If you're one of them, good for you! Their average debt per month is $1,154. That's much, much lower than the $7,527 average debt load for someone who doesn't pay it off.
Once you've gotten to that level, it's hard to pay it off. The average debt load for someone who has gone to credit counseling is $24,000. It's usually on five different cards, and it's 60% of their total income for the year.
Credit card debt is the portion of consumer debt that you are supposed to pay off every month. For this reason, it is also known as revolving debt. There are also some bank loans and finance company loans that are considered revolving debt, even though they are credit card debt. Consumer debt also includes auto and education loans.
Most people assume that shoppers rack up credit card debt in massive shopping binges. And, in fact, retailers promote credit card use as a convenience to their customers.
But, the no.1 cause of bankruptcy is health care costs. Most people reach for their credit cards first to pay off unexpected medical bills. When they find they can't pay off the high costs, then the interest rates start mounting. Today's higher deductible health plans don't help. Many people must add $2,000 to $5,000 to their credit card debt before the insurance covers medical costs.
The Bankruptcy Protection Act of 2005 was another significant reason for increasing credit card debt.
The law intentionally made it harder for people to declare bankruptcy. That was good for banks and creditors but had an unintended and disastrous effect on the average family. They were forced to run up credit card debt to pay their day-to-day bills.
The situation worsened in 2008 when gas prices skyrocketed to almost $5 a gallon. Drivers of SUVs paid $200 just to fill up their tanks. Homeowners who had maxed out credit cards then used home equity loans and lines of credit. That was one of the factors that created the 2008 financial crisis. When housing prices fell, homeowners had no equity in their homes. Many, faced with overwhelming bills, were forced to walk away, allowing their homes to default.
Credit Card Debt History
National credit card debt exceeded $1 trillion in 2008. That was an average of $8,299 in credit card debt per household. It was 38% of total U.S. consumer debt.
|Month||Credit Card Debt||Percent of Total Debt|
The only other time Americans relied so heavily on credit card debt was in the late 1990s. It was around 41% of the total. It didn't drop down too much during that recession, falling to 36% of total consumer debt.
Today, credit card debt is down to a more reasonable 26.2% of total debt. That's partly a result of the Dodd-Frank Wall Street Reform Act. It increased bank regulations, forcing them to tighten credit card standards. The Consumer Financial Protection Agency created more safeguards for those using credit cards. The last time Americans relied this little on credit card debt was in the late 1980s and early 1990s.