The current number of Americans with credit card debt

Roughly 41 percent of American households carry a credit card balance from month to month, according to the Federal Reserve's Survey of Household Economics and Decisionmaking. That means about 56 million households are paying interest on credit card debt rather than paying off their full balance each month. The percentage has stayed in the 40 to 43 percent range for the past several years, though it shifts slightly depending on economic conditions and when the survey was conducted.

The total amount Americans owe on credit cards is measured in the hundreds of billions of dollars. The Federal Reserve reports this figure quarterly, and it has grown over the past decade as both the number of cardholders and average balances have increased. However, the exact total varies by source and timing — some surveys count only revolving credit card debt, while others include related consumer debt.

These numbers matter because they show that carrying a balance is common, not unusual. But commonness does not mean it is the only option or the cheapest one for most people.

Key Takeaways

  • About 41 percent of American households carry a credit card balance month to month, based on Federal Reserve data.
  • The percentage has remained relatively stable between 40 and 43 percent over recent years, though it varies with economic conditions.
  • Total credit card debt in the United States is measured in hundreds of billions of dollars and continues to grow.
  • Carrying a balance is common, but the interest rates charged on unpaid balances make it an expensive way to borrow.

How credit card debt breaks down by age and income

Younger adults and middle-income households are more likely to carry credit card balances than other groups. Adults aged 30 to 49 have higher average balances than those under 30 or over 65, according to Federal Reserve data. This age group often has larger expenses — mortgages, children, education costs — that can push them toward carrying debt.

Households earning between $40,000 and $100,000 annually are more likely to carry balances than either lower-income or higher-income households. Lower-income households may not have access to credit cards at all, while higher-income households are more likely to pay off their full balance each month. The relationship between income and debt is not straightforward: more income does not automatically mean less debt, because spending patterns and financial priorities vary widely.

Regional differences also exist. Some states have higher rates of credit card debt than others, though the variation is not dramatic — most states fall within a few percentage points of the national average.

Why Americans carry credit card balances

The most common reason people carry a balance is that they spent more than they could pay off in full that month. This can happen because of unexpected expenses — a car repair, a medical bill, a job loss — or because regular spending straightforward exceeded income. The Federal Reserve's surveys show that unexpected events and income disruptions are the leading causes of carried balances.

Some people carry balances intentionally, using credit cards as a tool for short-term borrowing while they wait for income or savings to arrive. Others may not fully understand how interest compounds on unpaid balances, or they may underestimate how much they owe. A smaller group deliberately carries a small balance to build or maintain their credit history, though this is not necessary — paying in full and on time also builds credit.

The cost of carrying a balance is significant. The average credit card interest rate is currently between 20 and 22 percent, depending on the card and the cardholder's creditworthiness. At that rate, a $5,000 balance costs roughly $100 per month in interest alone if only minimum payments are made.

How credit card debt compares to other types of consumer debt

Credit card debt is the most expensive type of consumer debt because of the interest rates charged. A typical credit card rate of 20 percent is far higher than a car loan (5 to 10 percent), a mortgage (6 to 8 percent), or a personal loan (8 to 15 percent). This means that for the same dollar amount borrowed, credit card debt costs more in interest over time.

However, credit card debt is also smaller in total volume than mortgage debt or auto loan debt. Americans owe roughly $900 billion in credit card debt but over $11 trillion in mortgage debt. Credit cards are a smaller piece of total household debt, but they are the most expensive piece for those who carry them.

Student loan debt is another major category. Unlike credit cards, student loans often have lower interest rates and longer repayment periods, which spreads the cost over many years. But student loans also cannot be discharged in bankruptcy in most cases, while credit card debt can be.

Trends in credit card debt over the past decade

Credit card debt has grown steadily since 2010, with some interruption during the 2020 pandemic. When lockdowns began, many people reduced spending and paid down balances, causing total credit card debt to dip slightly. As the economy reopened and inflation rose, spending increased again and debt balances climbed back up.

The percentage of households carrying a balance has remained relatively flat, hovering around 41 to 43 percent. What has changed is the average balance per household that carries debt — it has increased over time. This suggests that people who carry balances are carrying larger ones, rather than more people starting to carry balances.

Interest rates on credit cards have also risen in recent years as the Federal Reserve raised its benchmark rate. Cards issued in 2023 and 2024 carry higher rates than those issued in 2020 and 2021, making it more expensive to carry a balance now than it was a few years ago.

The relationship between credit card debt and credit scores

Carrying a balance does not harm your credit score by itself. What matters is whether you pay on time and how much of your available credit you are using. If you carry a $2,000 balance on a card with a $10,000 limit, you are using 20 percent of your available credit, which is generally considered healthy. Using more than 30 percent of your available credit can lower your score, regardless of whether you pay on time.

Missing a payment, however, will damage your credit score significantly. A payment that is 30 days late appears on your credit report and stays there for seven years. This is far more harmful than carrying a balance. Someone with a $5,000 balance who pays on time every month will have a better credit score than someone with no balance who misses a payment.

Paying off a balance in full also does not boost your score more than paying it down gradually. What your credit score tracks is payment history and utilization — the behavior itself, not the speed of payoff.

What happens when credit card debt goes unpaid

If a credit card payment is missed, the card issuer typically charges a late fee (usually $25 to $40 for the first late payment) and reports the late payment to credit bureaus after 30 days. After 60 days, the interest rate on the card may increase to a penalty rate, which can be 29 percent or higher. After 180 days of non-payment, the debt is typically charged off — meaning the card issuer writes it off as a loss and may sell it to a debt collection agency.

Once debt is charged off, a collection agency may contact you to recover the money. They can sue you in court, and if they win, they may be able to garnish your wages or place a lien on your property, depending on your state's laws. The debt can appear on your credit report for up to seven years from the date of the first missed payment.

Bankruptcy is an option for people with overwhelming debt, but it has serious long-term consequences for credit and finances. It remains on your credit report for 7 to 10 years and makes it harder to borrow, rent housing, or sometimes even get hired.

Frequently Asked Questions

What percentage of Americans have zero credit card debt?

About 59 percent of American households do not carry a credit card balance from month to month. This includes people who do not use credit cards at all and people who use them but pay off the full balance each month. The Federal Reserve does not separate these two groups in its main surveys.

Is it normal to have credit card debt?

Yes — 41 percent of households carry a balance, so it is common. But common does not mean necessary or unavoidable. Many people carry balances because of unexpected expenses or income disruptions, while others could pay them off but choose not to. Your situation depends on your own circumstances, not on what others do.

How much credit card debt does the average American household carry?

The average varies depending on whether you count only households with balances or all households. Among households that carry a balance, the average is roughly $6,000 to $7,000, though this figure changes year to year. Among all households, the average is lower because it includes the 59 percent that carry no balance.

Does paying off credit card debt improve your credit score?

Paying off a balance does improve your credit score because it lowers your credit utilization — the percentage of available credit you are using. However, the improvement is gradual and depends on other factors like payment history. Paying on time matters more than the balance itself.

Why do credit card interest rates keep going up?

Credit card rates follow the Federal Reserve's benchmark interest rate, which has risen since 2022. When the Fed raises rates to fight inflation, credit card companies raise their rates too. Rates also vary by cardholder — people with lower credit scores are offered higher rates than those with higher scores.