Credit Card Debt Study

Alina Comoreanu, Senior Researcher
Jun 24, 2020

Credit card debt statistics speak to the financial health of American households. They can also foreshadow over-borrowing bubbles, changes to lending standards, and other trends with the potential to impact our wallets. In the case of Q1 2020, credit card debt statistics also give us a tantalizing glimpse at what could have been had the coronavirus not come to town.

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. That indicates U.S. consumers were on pace for one of their best years before the COVID-19 pandemic turned it into one of the worst. WalletHub now projects that U.S. consumers will rack up more than $140 billion throughout the rest of 2020, ending the year with a net increase of $80 billion in credit card debt.

Below, you can learn more about the current credit card debt landscape, including which cities owe the most and how that has changed, according to the latest data available from TransUnion and the Federal Reserve.

Main Findings

The $60.2 billion in credit card debt paid during Q1 2020 is the highest paydown since at least 1986 (and 70% higher than the post-Great Recession average for a first quarter).

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Outstanding credit card debt dropped by roughly 6.5% compared to the previous quarter.

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We ended 2019 with $76.7 billion in new credit card debt, and WalletHub projects an $80 billion increase in 2020.

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Since the end of the Great Recession, consumer performance has regressed on a year-over-year basis in 6 of every 10 quarters.

Year Q1 Q2 Q3 Q4
2010 X X checkmark X
2011 X X X X
2012 checkmark checkmark checkmark checkmark
2013 X X checkmark X
2014 X X X X
2015 checkmark X X checkmark
2016 X X checkmark X
2017 checkmark checkmark X X
2018 checkmark checkmark X checkmark
2019 X X checkmark checkmark
2020 checkmark

At 3.91% for Q1 2020, the credit card charge-off rate is up 7% compared to the previous quarter.

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Average Credit Card Debt per Household

Stat Q1 2020 Q1 2019 Change
Average Credit Card Debt per Household $8,509 $8,367 1.7%
Total Credit Card Debt $1,002B $986B 1.7%
Quarter Net Increase -$60.2B -$38.3B 57.2%

 

The average household’s credit card balance is $8,509. That is $1,889 below WalletHub’s projected breaking point.

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Cities with the Biggest & Smallest Credit Card Debt Paydown

*99th Percentile = Biggest Paydown
*1st Percentile = Smallest Paydown

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