What does the average person owe on credit cards?
As of March 2023, the average amount of revolving credit card debt owed per U.S. household with credit card debt is $7,876, according to NerdWallet's 2022 American Household Credit Card Debt Study.
The average American has a credit card balance of $6,501, an all-time high, according to Experian. That's an increase from $5,910 in 2022 and $5,221 in 2021. Inflation and higher interest rates have led many consumers to put more on their credit cards.
There are several ways to find your credit card balance. The simplest way is to log into your account online or via your card issuer's mobile app. Your current balance and statement balance will also be shown on your bill along with the required minimum payment. You can also call customer service.
| Debt type | Average amount paid monthly |
|---|---|
| Mortgages | $1,855 |
| Auto loans | $690 |
| Personal loans | $517 |
| Credit cards | $272 |
The median individual income in for Americans in 2022 was $56,368. Median means that half had a higher income, half had a lower income. The average American household debt load, including mortgage, is $101,915.
| Generation | Average total debt (2023) | Average total debt (2022) |
|---|---|---|
| Gen Z (18-26) | $29,820 | $25,851 |
| Millenial (27-42) | $125,047 | $115,784 |
| Gen X (43-57) | $157,556 | $154,658 |
| Baby Boomer (58-77) | $94,880 | $96,087 |
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
| Q3 2023 | Q3 2022 | |
|---|---|---|
| Gen Z18–26 | $3,262 $3,262 | $2,854 $2,854 |
| Millennials27–42 | $6,521 $6,521 | $5,649 $5,649 |
| Gen X43–58 | $9,123 $9,123 | $8,134 $8,134 |
| Baby boomers59–77 | $6,642 $6,642 | $6,245 $6,245 |
About 43% of Americans say they depend on their credit cards for essential living expenses, such as housing, food, and utilities. Those costs add up quickly. The average credit card user spends $1,579 on their cards each month, with a whopping 1 in 8 (12%) saying they put more than $5,000 on their cards each month.
Carrying a balance can lead to expensive interest charges and growing debt. Plus, using more than 30% of your credit line is likely to have a negative effect on your credit scores. Work on making it a habit to always pay off your credit card in full.
Is it bad to pay off credit card debt in full?
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
- Using a balance transfer credit card. ...
- Consolidating debt with a personal loan. ...
- Borrowing money from family or friends. ...
- Paying off high-interest debt first. ...
- Paying off the smallest balance first. ...
- Bottom line.
Americans are tumbling deeper into debt, with the typical household paying $1,583 a month on various loans, a recent study found. That's a more than $300 increase from people's average monthly debt payment in 2020, according to LendingTree.
Calculating Your Credit Card Minimum Monthly Payment
Usually, your minimum monthly payment is 2-4% of the principal balance depending on your banking institution. Let's say that your monthly payment will be 2% of the principal balance.
More Americans are trapped in a credit card debt spiral and fewer are able to pay their bills in full at the end of the month. Now, 49% of credit card holders carry debt from month to month, up from 46% last year, according to a new report by Bankrate.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
Ideally, financial experts like to see a DTI of no more than 15 to 20 percent of your net income. For example, a family with a $250 car payment and $100 of monthly credit card payments, and $2,500 net income per month would have a DTI of 14 percent ($350/$2,500 = 0.14 or 14%).
Men have 20% more personal loan debt than women. Men have 16.3% more auto loan debt than women. Men have 9.7% more mortgage debt than women. Women have 2.7% more student loan debt than men.
Fewer than one quarter of American households live debt-free. Learning ways to tackle debt can help you get a handle on your finances.
Research from financial services company Northwestern Mutual found that excluding mortgages, the average personal debt per individual sat at $21,800 in 2023, significantly lower than the $29,800 recorded in 2019.
Can you live off credit cards?
Living on credit cards can't last forever, because eventually you'll reach the end of your credit line. Consider it a stop-gap measure, not a permanent plan. “In a lot of cases, you won't know how long your emergency will last,” says Nitzsche. “It could be a few months, it could be a year.
In 2022, 23 percent of Americans had no emergency savings. Because building savings takes time, McBride recommends people automate contributing to their savings accounts as much as possible.
Homeowners typically make their normal monthly mortgage payments and expect to pay off their homes over 30 years.
The average FICO credit score in the US is 718, according to the latest FICO data from April 2023. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
Prime (credit scores of 660-719) Super-prime (credit scores of 720 or above)
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