Americans began 2020 owing more than $1 trillion in credit card debt after a $76.7 billion net increase during 2019. Consumers quickly changed course, however, posting the biggest first-quarter credit card debt paydown ever, at $60 billion. This was followed by new records for Q2 and Q3, when consumers payed down $58.8 billion more in credit card debt. Although first quarter paydowns are normal, Q2 and Q3 2020 mark the first times in more than 30 years that credit card debt has dropped from April through September.
As a result, WalletHub now projects that U.S. consumers will end the year with a decrease of about $89 billion in credit card debt for the first time since the end of the Great Recession in 2009. Below, you can learn more about the current credit card debt landscape, including which cities have the most and least sustainable debts, according to the latest data available from TransUnion and the Federal Reserve.
Main Findings
The $0.7 billion in credit card debt repaid during Q3 2020 is the first paydown for any third quarter in the last 35 years.
Outstanding credit card debt dropped by just 0.9% during Q3, compared to the previous quarter.
Credit card debt rose by $76.7 billion during 2019, and WalletHub now projects a decrease of about $89 billion in 2020.
Since the end of the Great Recession, consumer performance has regressed on a year-over-year basis in 6 of every 10 quarters.
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At 3.34% for Q3 2020, the credit card charge-off rate is down 17.3% compared to last quarter.
Average Credit Card Debt per Household
| Stat | Q3 2020 | Q3 2019 | Change |
|---|---|---|---|
| Average Credit Card Debt per Household | $7,849 | $8,798 | -10.8% |
| Total Credit Card Debt | $926.3B | $1,024.2B | -9.6% |
| Quarter Net Increase | -$0.7B | $21.5B | -103.26% |
The average household’s credit card balance is $7,849. That is $2,636 below WalletHub’s projected breaking point.
Cities with the Least and Most Sustainable Credit Card Debt
Consumers nationwide payed down $0.7 billion in credit card debt during Q3 2020, yet we still collectively owe more than $926 billion to credit card companies, so we’re not out of the woods yet. We’re not equally burdened by or recovering from this years-long credit card debt crisis at the same rate, either. Below, you can see which cities have the most and least work ahead of them.
Least-Sustainable Credit Card Debt
| Most-Sustainable Credit Card Debt
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For the full list, please see our credit card debt payoff report.
Tips For Managing Credit Card Debt
- Make a Budget & Stick to It: It’s difficult to spend within reason or plan savings if you don’t know how your monthly spending compares to your take-home pay, or where that money is going. That is why you should rank-order your expenses – including debt payments, emergency fund contributions and other savings – and trim the fat, if necessary.Most importantly, once you develop your budget, make sure to stick to it or else you’ll have simply wasted your time.
- Build an Emergency Fund: With a safety net of cash to fall back on, you won’t be as likely to fall behind on your bills in the event of emergency expenses or unplanned joblessness. Your goal should be to gradually save about a year’s worth of after-tax income. In other words, set aside a little bit every month until you’ve got a nice cushion.
- Improve Your Credit: This might sound a bit counterintuitive, seeing as more credit could mean more debt. But improving your credit standing will have a dramatic impact on the cost of your debt. And reducing the cost of your debt will allow you to pay it off faster. Better credit can also make it easier to find a job or a place to live, both of which impact your bottom line.You can check your latest credit score for free and get personalized credit-improvement tips on WalletHub.
- Try the Island Approach: The Island Approach is a strategy that involves using a collection of credit cards, with each serving a specific purpose. For example, you could transfer your existing debt to a 0% balance transfer credit card to save on finance charges and get out of debt sooner. And you could use a rewards card or two – perhaps one with travel rewards and one with cash back, or maybe a store credit card – for purchases that you’ll be able to pay off by the end of the month.This will enable you to get the best possible collection of terms. It will also tell you when you’re overspending. Finance charges on your everyday spending cards will signal a need to cut back.
- Repay Your Most Expensive Debt First: Most people with serious credit card debt have multiple balances. If that’s the case for you, try the “avalanche method.” That means putting the majority of your monthly debt payment toward the balance with the highest interest rate and making the minimum payment required on the rest. Once your most expensive debt is paid off, repeat the process until you’re debt-free.
- Evaluate Your Job Situation: In some cases, all the budgeting and planning in the world won’t be enough to solve your debt problems. You may need to explore whether higher-paying opportunities exist for people with your background or consider acquiring some new skills to make yourself more marketable.This may require a bit of an investment in yourself, but as long as you get a worthwhile return, it’s money well spent.
Methodology
WalletHub’s quarterly credit card debt studies are based on analysis of the latest data on consumers’ finances available from TransUnion as well as the Federal Reserve and Bureau of Labor Statistics. Quarterly changes in credit card debt levels include both the total amount outstanding (revolving credit, not seasonally adjusted) and charged-off debt (not seasonally adjusted) that is no longer on credit card companies’ books but consumers continue to owe.
Outstanding and household debt are adjusted for inflation with data from Bureau of Labor Statistics.
Raw Data
Net Result of Consumer Credit Card Debt Q1 2008 – Q3 2020
| Info | Net Result in Debt Load | Relative to Same Period Last Year | Relative to Same Period Two Years Ago |
|---|---|---|---|
| 2020 Q3 | -$707,144,182 | -103% | -103% |
| 2020 Q2 | -$58,141,226,021 | -264% | -321% |
| 2020 Q1 | -$60,184,308,579 | 57% | 48% |
| 2019 | $76,673,718,951 | 7% | -15% |
| 2019 Q4 | $57,926,713,138 | 0% | -15% |
| 2019 Q3 | $21,547,934,517 | -23% | -5% |
| 2019 Q2 | $35,536,757,016 | 35% | 10% |
| 2019 Q1 | -$38,337,685,720 | -6% | 17% |
| 2018 | $71,548,989,788 | -21% | -19% |
| 2018 Q4 | $58,124,163,341 | -14% | -1% |
| 2018 Q3 | $27,831,264,802 | 22% | 25% |
| 2018 Q2 | $26,308,253,610 | -18% | -23% |
| 2018 Q1 | -$40,714,691,964 | 24% | 53% |
| 2017 | $90,043,075,717 | 2% | 152% |
| 2017 Q4 | $67,771,838,864 | 15% | 177% |
| 2017 Q3 | $22,760,748,673 | 3% | -1% |
| 2017 Q2 | $32,225,345,637 | -6% | -1% |
| 2017 Q1 | -$32,714,857,456 | 23% | -26% |
| 2016 | $88,478,901,376 | 148% | 50% |
| 2016 Q4 | $58,687,921,789 | 139% | 27% |
| 2016 Q3 | $22,193,437,675 | -3% | 35% |
| 2016 Q2 | $34,151,330,937 | 5% | 20% |
| 2016 Q1 | -$26,553,789,024 | -40% | -18% |
| 2015 | $35,702,204,727 | -39% | -15% |
| 2015 Q4 | $24,504,590,023 | -47% | -43% |
| 2015 Q3 | $22,914,798,444 | 40% | 99% |
| 2015 Q2 | $32,502,478,451 | 14% | 61% |
| 2015 Q1 | -$44,219,662,191 | 37% | 36% |
| 2014 | $58,809,828,025 | 40% | 86% |
| 2014 Q4 | $46,296,931,874 | 9% | 18% |
| 2014 Q3 | $16,415,925,347 | 43% | 27% |
| 2014 Q2 | $28,449,454,671 | 41% | 102% |
| 2014 Q1 | -$32,352,483,866 | 0% | -7% |
| 2013 | $41,922,111,327 | 33% | -9% |
| 2013 Q4 | $42,626,331,608 | 9% | -3% |
| 2013 Q3 | $11,507,031,702 | -11% | -28% |
| 2013 Q2 | $20,240,903,637 | 44% | 6% |
| 2013 Q1 | -$32,452,155,620 | -6% | -1% |
| 2012 | $31,627,720,268 | -31% | 1250% |
| 2012 Q4 | $39,244,751,149 | -10% | 52% |
| 2012 Q3 | $12,922,442,471 | -19% | 136% |
| 2012 Q2 | $14,080,260,800 | -26% | 46% |
| 2012 Q1 | -$34,619,734,152 | 5% | -10% |
| 2011 | $46,006,490,576 | 1864% | 5447% |
| 2011 Q4 | $43,723,254,464 | 70% | 94% |
| 2011 Q3 | $15,971,815,943 | 192% | 33% |
| 2011 Q2 | $19,152,005,326 | 99% | 101% |
| 2011 Q1 | -$32,840,585,156 | -15% | -27% |
| 2010 | $2,343,022,283 | 372% | -96% |
| 2010 Q4 | $25,774,800,070 | 15% | -28% |
| 2010 Q3 | $5,472,559,265 | -54% | -60% |
| 2010 Q2 | $9,624,601,959 | 1% | -59% |
| 2010 Q1 | -$38,528,939,010 | -14% | 122% |
| 2009 | -$860,367,447 | 102% | 101% |
| 2009 Q4 | $22,481,545,106 | -38% | -65% |
| 2009 Q3 | $11,986,891,151 | -13% | -69% |
| 2009 Q2 | $9,516,695,635 | -60% | -70% |
| 2009 Q1 | -$44,845,499,339 | 159% | 104% |
| 2008 | $56,165,464,197 | -50% | -42% |
| 2008 Q4 | $36,046,098,712 | -44% | -34% |
| 2008 Q3 | $13,751,457,775 | -64% | -46% |
| 2008 Q2 | $23,689,133,013 | -26% | -4% |
| 2008 Q1 | -$17,321,225,304 | -21% | 107% |
Net Result in Debt Load – Green indicates that consumers decreased their debt relative to the previous quarter. Red indicates they increased their debt relative to the previous quarter.
Relative to Same Period – Green indicates that consumers either paid down more debt or accumulated less debt than they did in the previous two years. Red indicates that they either paid down less debt or accumulated more debt than they did in the same quarter in the previous two years.
Consumer Credit Card Debt and Charge-off Data (in Billions) Q1 1986 – Q3 2020:
| Period | Total Outstanding Credit Card Debt | Change In Outstanding Credit Card Debt | Quarterly Credit Card Charge-Off in Dollars | Net Result in Debt Load |
|---|---|---|---|---|
| 2020 Q3 | $926.3 | -$8.5 | $7.7 | -$0.7 |
| 2020 Q2 | $934.8 | -$67.5 | $9.4 | -$58.1 |
| 2020 Q1 | $1,002.3 | -$70.0 | $9.8 | -$60.2 |
| 2019 | $1,072.3 | $38.8 | $37.8 | $76.7 |
| 2019 Q4 | $1,072.3 | $48.1 | $9.8 | $57.9 |
| 2019 Q3 | $1,024.2 | $12.6 | $8.9 | $21.5 |
| 2019 Q2 | $1,011.6 | $25.9 | $9.7 | $35.5 |
| 2019 Q1 | $985.7 | -$47.8 | $9.4 | -$38.3 |
| 2018 | $1,033.5 | $35.8 | $35.8 | $71.5 |
| 2018 Q4 | $1,033.5 | $48.9 | $9.2 | $58.1 |
| 2018 Q3 | $984.6 | $19.3 | $8.5 | $27.8 |
| 2018 Q2 | $965.3 | $17.3 | $9.0 | $26.3 |
| 2018 Q1 | $948.0 | -$49.7 | $9.0 | -$40.7 |
| 2017 | $997.7 | $56.6 | $33.5 | $90.0 |
| 2017 Q4 | $997.7 | $58.7 | $9.1 | $67.8 |
| 2017 Q3 | $939.0 | $14.8 | $7.9 | $22.8 |
| 2017 Q2 | $924.2 | $23.9 | $8.4 | $32.2 |
| 2017 Q1 | $900.3 | -$40.8 | $8.1 | -$32.7 |
| 2016 | $941.1 | $60.4 | $28.0 | $88.5 |
| 2016 Q4 | $941.1 | $50.5 | $8.1 | $58.7 |
| 2016 Q3 | $890.6 | $15.9 | $6.4 | $22.2 |
| 2016 Q2 | $874.7 | $27.3 | $6.8 | $34.2 |
| 2016 Q1 | $847.4 | -$33.3 | $6.7 | -$26.6 |
| 2015 | $880.7 | $10.8 | $25.0 | $35.7 |
| 2015 Q4 | $880.7 | $18.1 | $6.4 | $24.5 |
| 2015 Q3 | $862.6 | $17.0 | $6.0 | $22.9 |
| 2015 Q2 | $845.6 | $26.1 | $6.4 | $32.5 |
| 2015 Q1 | $819.5 | -$50.4 | $6.2 | -$44.2 |
| 2014 | $869.9 | $32.6 | $26.2 | $58.8 |
| 2014 Q4 | $869.9 | $39.8 | $6.5 | $46.3 |
*Numbers may differ from year to year due to the fact that the Federal Reserve regularly retroactively updating figures. Questions or requests for information can be directed to our media department.