The average American credit card debt is $8,701 per household, according to WalletHub’s 2019 Credit Card Debt Study. Americans started 2019 with over $1 trillion in credit card debt. And though we repaid $38.2 billion of that amount by the end of Q1, we added $35.5 billion in new debt by the end of Q2. That’s the largest Q2 buildup, ever, and we continued adding to our tab throughout the rest of the year. In other words, there is reason to be concerned about the average American’s credit card debt.
The $8,701 that the average household owes is $498 higher than what WalletHub considers sustainable. That means minimum payments will eventually become too expensive for people with so much credit card debt. That will lead to missed payments and cause charge-off rates to rise. And that in turn will hurt consumers’ credit scores, lenders’ bottom lines and even the economy as a whole.
Average American Credit Card in 2020:
Average household debt: The average American household owes $8,701 in credit card debt, according to WalletHub.
Average debt over time: The average American household’s credit card balance has increased by more than 80% since 1990, after adjusting for inflation.
City with the least sustainable credit card debt: It will take people in Jacksonville, North Carolina roughly 138 months to pay off their median debt of $3,435, and it will cost $4,048 to pay off.
City with the most sustainable credit card debt: It will take residents of Cupertino, California roughly 12 months to pay off the city’s median credit card debt of $2,408. They will pay an estimated $215 in finance charges in doing so.
You may owe more or less credit card debt than the average American. But it’s important to remember that carrying any credit card balance from month to month will be very expensive, unless you have a 0% introductory APR. The average credit card offer has a 19.02% APR.
Plus, when you carry a credit card balance, it’s hard to determine whether you’re regularly overspending on new purchases. That can easily lead to more debt than you can afford and then missed payments. Both of those bring about credit score damage.
If you’re currently dealing with credit card debt, you’ll want to make sure you pay it off efficiently. That means cutting back on extraneous spending and attacking the balances with the highest interest rates first. You may also want to look into balance transfer credit cards or debt management plans.