Average Credit Card Debt: U.S. Statistics

Is Your Credit Card Debt Higher Than Average?

credit card debt
Your credit card debt is probably not as much as Carrie's and Charlotte's. Then again, their's is probably higher than the average. Photo by James Devaney/WireImage

The average credit card debt per U.S. household was $8,366 in May 2017. That's $1.018 trillion in total credit card debt divided by 122 million U.S. households. It's 8.7 percent higher than the month before. (Source: "G-19 Credit Card Report," Federal Reserve. "Quick Facts," U.S. Census.)

The average credit card debt per individual adult (there's 321 million) is $3,183. But, if you're comparing your credit card debt to the average American, that's a little low.

Credit Cards.com's latest survey of credit card debt per card-carrying adult is $5,284.

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, and it usually gets worse. 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 percent of their total income for the year.  (Source: "Average Credit Card Debt? Take Your Pick," Fox Business News, July 13, 2013.)

Definition

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. For every month since 2006, see Consumer Debt Statistics

Causes

Most people assume that shoppers rack up credit card debt in massive shopping binges. And, in fact, retailers promotes credit card use as a convenience to their customers.

But the no.1 cause of bankruptcy is healthcare 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 - $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 for 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 nearly $5.00 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. (Source: "Revised Credit Card Debt Chart, " Federal Reserve.)

Credit Card Debt History

National credit card debt reached a peak of $1.022 trillion in April 2008. That's was an average of $8,299 in credit card debt per household. That was more than a third (38 percent) of total U.S. consumer debt.

The only other time Americans relied so heavily on credit card debt was in the late 1990s. It was 41 percent of the total. It didn't drop down too much during that recession, falling to 36 percent of total consumer debt.

Today, it's down to a more reasonable 26 percent. 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.