Average Credit Card Debt In America, And How To Manage Your Own

Collectively, American consumers carry $1.129 trillion in credit card debt, according to the latest Q4 2023 Federal Reserve Bank data. Meanwhile, the average credit card debt per person in the U.S. is around $6,360 based on recent data from TransUnion.

That second number can change drastically when you delve into more specifics, though. Thanks to factors like age, location, income and local economies, no two people’s financial situation is exactly alike.

Let’s break down the average credit card debt for different groups based on certain demographics, and we’ll also review helpful tips for managing this debt.

How Much Credit Card Debt Does The Average American Have?

The COVID-19 pandemic that began in early 2020 has caused the average American credit card debt to fall, rise and fall again over the past 5 years. Changes in the economy and rising inflation have also resulted in consumers becoming more reliant on credit cards and other forms of revolving debt.

Here’s the average credit card debt per person from 2019 through 2023, according to data from the Federal Reserve and credit bureaus.

Source:  Experian

As you can see, the dip that occurred during the height of the pandemic went away and credit card debt rose to record highs by the end of 2022, following interest rate hikes from the Federal Reserve and more Americans taking on debt during that time.

What Is The Average Credit Card Debt By State?

The average American credit card debt varies from state to state. For example, Experian found that the state with the highest average credit card balance in 2023 was Alaska at $7,863, while Iowa has one of the lowest at $5,227.

While the average debt is different for every state, we’ve broken down the five states with the highest average credit card debt per individual. Then, we’ll look at the five states with the lowest.

States With The Highest Credit Card Debt

Here are the five states with the highest average credit card debt per resident.

Source: Lending Tree, Average Credit Card Debt, Q4 2023

The most recent study from Lending Tree found that residents of New Jersey have the highest average credit card balance, which is 80% higher than average balance in Mississippi, our state with the lowest credit card debt. States with higher costs of living will typically rank higher on the country’s average debt scale.

States With The Lowest Credit Card Debt

Here are the five states with the lowest individual credit card balances, beginning with the state with the least debt – Mississippi.

Source: Lending Tree, Average Credit Card Debt, Q4 2023

The states with the least amount of individual credit card debt are generally located in the South and known for their affordable cost of living.

Average Credit Card Debt By Age

Another debt-affecting factor for cardholders is the generation to which they belong. Here’s how average credit card balances is broken down among age groups, as of Q3 of 2023.

Source: Experian, Change in Average Credit Card Balances By Generation, Q3 2023

Generation X holds the highest average debt per individual at $9,123, while Gen Z has the lowest at $3,262 – likely owing to their younger age and perhaps having less time and familiarity with credit cards. Student loans are likely a major contributor to higher credit card usage among Gen X and millennials.

Average Credit Card Debt By Income

Average credit card debt per person can also differ with how much money you make. Take a look below at how credit card debt varies among income percentiles.

Source: Federal Reserve, Survey of Consumer Finances 2022

As the table illustrates, the higher an individual or family’s income, the greater their average credit card debt tends to be.

Tips For Managing Your Credit Card Debt

Regardless of your age, income or where you live, you don’t have to stay in debt forever. If you want to start paying down debt, consider any of the following methods for getting out of credit card debt.

Reevaluate Your Budget

The best way to stop racking up debt is limiting your credit card usage. Sit down and review your finances to figure out where most of your credit card spending occurs, then formulate a new budget plan around that.

If you can use your credit card less often, you may find you can increase your monthly savings.

Adopt A New Debt-Paying Method

Two of the most popular methods for paying down debt are the avalanche and snowball methods.

With the debt avalanche method, you focus on paying down your debts with the highest interest rates. With the average interest rate for credit cards now above 20%, targeting your higher-interest debts could save you a lot of money in the long run. Once one card is paid down, apply the same amount you were paying to that card to your next-highest interest loan.

The debt snowball method works similarly but targets loan amounts instead. The strategy here is to pay off your credit cards starting with the card featuring the lowest outstanding balance. You’ll then work your way up to the card with the highest balance. This method allows cardholders to see early wins by paying down some cards sooner.

Use A Balance Transfer Card

With a balance transfer card, cardholders can move their outstanding balances from different cards onto a single card, using the one card to pay off the others. With all of your debt on a lone card, you’ll only have to worry about one monthly payment – sometimes with a lower interest rate.

Some credit card issuers may offer an introductory period for new cards, with an annual percentage rate (APR) of 0%. These periods typically last 6 – 21 months, during which you’ll owe no interest on credit card payments.

Consolidate Your Debt

Debt consolidation, as with a balance transfer card, takes all of your debt and puts it in one place while you pay it down. It can simplify the repayment process if you have a lot of debt on different cards, potentially saving you in interest if you secure a more manageable rate.

Some people take out a personal loan to consolidate their credit card debt, perhaps in part because the application process is typically quick and straightforward. Personal loan approval depends largely on your credit score, which also affects your interest rate. For this reason, make sure your credit is good or excellent if you want a good rate on your new loan.

FAQs About The Average American Credit Card Debt

Here’s what a lot of people are asking about the average credit card debt in America.

How many people have over $10,000 in credit card debt?

A survey conducted by GoBankingRates.com in 2022 estimated that around 14 million Americans owe over $10,000 in credit card balances. Credit card interest rates, at above 20%, are also the highest they’ve been in 30 years.

What is a healthy amount of credit card debt to have?

Your debt-to-income ratio (DTI) can help you gauge whether you carry a balance that lenders would consider healthy. In most situations, a DTI at or under 43% is considered a healthy amount of debt. Having a certain amount of debt is important for keeping a good credit score.

What amount is considered high debt?

A DTI above 43% is typically considered too high. However, if you’re struggling to keep up with your monthly expenses, you can safely conclude you have too much debt no matter your exact DTI. Carrying too much debt can have negative consequences on your credit report and credit score.

How many Americans are debt-free?

 Around  23% of Americans are completely debt-free, according to the Federal Reserve. With the number of mortgages, auto loans and student loans held by people across the country, most individuals and families will carry some form of debt even if they don’t have a credit card.

Final Thoughts

Credit card debt is incredibly common in America; if you’re in debt, you’re not alone. If you find that your debt is keeping you from having any money in savings, it’s best to reevaluate your spending habits or adopt a method for paying down your debt more quickly.

Look into a personal loan from Rocket Loans℠ to better manage your debt. Start an application today to see how much you prequalify for.