Bankrate’s 2024 Credit Card Debt Report

Americans have a love-hate relationship with their credit cards. Though many people try their best to pay their cards off in full, a large percentage of American credit cardholders are carrying a balance from month to month. Along with that, keeping a credit card balance is more costly now than it has been in decades.

Between March 2022 and July 2023, the Federal Reserve steadily raised its federal funds rate, and since then, the national average annual percentage rate (APR) has been among the highest levels ever recorded. In other words, today’s Americans taking on credit card debt pay much more in interest than they would have on that same debt only a few years ago. On top of that, high inflation has contributed to many Americans going into debt to finance their normal levels of spending.

To keep up with the country’s changing credit card habits, Bankrate conducted several surveys with polling agencies YouGov Plc and SSRS in the last year. In each poll, Bankrate surveyed over 2,000 Americans over the age of 18 on topics like credit card usage, how long they’ve maintained a balance and if they’re prioritizing paying down that balance.

The resulting data, weighted to represent all U.S. adults, shines a light on Americans’ struggles with credit card debt. As of June 2024 polling, half (50 percent) of credit cardholders carry credit card debt from month to month, according to Bankrate’s latest Credit Card Debt Survey. This is up from 44 percent in January 2024. It’s the highest percentage in Bankrate’s polling since March 2020, when 60 percent of credit cardholders carried debt from month to month.

Read on for a snapshot of Americans’ attitudes and habits on credit card debt. Bankrate will update this with new data throughout the year.

Key takeaways from this report

• 50% of credit cardholders say they carry a balance from month to month, according to Bankrate’s Credit Card Debt Survey.

• 36% of U.S. adults have more credit card debt than emergency savings, according to Bankrate’s 2024 Emergency Savings Report.

• 47% of U.S. adults who say money negatively affects their mental health, at least occasionally, cite being in debt as a reason why, according to Bankrate’s Money and Mental Health Survey.

• 38% of U.S. adults are willing to go into debt for discretionary purchases this year, according to Bankrate’s Discretionary Spending Survey.

• 67% of Americans with credit card debt still make an effort to maximize credit card rewards, according to Bankrate’s Chasing Rewards in Debt Survey.

Credit cardholders are frequently carrying balances, often for more than 2 years

Key insights from Bankrate’s Credit Card Debt Survey

• 50% of credit cardholders say they carry a balance from month to month.

• 60% of U.S. adults with credit card balances have had that balance for at least a year.

Personal finance experts recommend paying your credit card in full every month to avoid high interest rates on your purchases. But in practice, a growing percentage of Americans carry a credit card balance, and many have been in debt for years. Sixty-percent of U.S. adults who carry a balance on their credit cards have had the balance for at least a year, according to our Credit Card Debt Survey. That’s up from 50 percent in 2021. Another 32 percent of people carrying a balance on their credit cards have had a balance for less than a year.

More than 2 in 5 (42 percent) of people who carry a balance on their credit cards have a plan to pay it off, but for many people, high inflation and interest rates have been affecting their ability to stay out of debt. Around one-third (34 percent) of people who carry a credit card balance from month to month say inflation has made their credit card debt burden worse since the beginning of 2022. Thirty-two percent say the same about high interest rates.

What’s more, 35 percent of people carrying a balance on their credit cards have more credit card debt now than they did at the beginning of 2022, and 24 percent say they feel less confident in their ability to get out of credit card debt now than they did at the beginning of 2022. Nearly 1 in 5 (17 percent) people who carry a balance on their credit cards worry they might not be able to make their minimum credit card payments at some point in the next six months.

“Credit card debt won’t go away on its own. If you make minimum payments toward the average balance at the average credit card rate, you’ll be in debt for 18 years and will owe more than $9,000 in interest,” Bankrate Senior Industry Analyst Ted Rossman says. “It’s important to prioritize credit card debt payoff because this is probably your highest-cost debt by a wide margin.”

For those struggling to pay off their debt, Rossman often suggests a 0 percent balance transfer card, which allows cardholders to focus on chipping down their balance, without paying a high interest rate.

“If you have credit card debt — and no shame, a lot of people do — it’s important to prioritize your interest rate,” Rossman says.

Credit card debt, by generation

Gen X credit cardholders are the most likely generation to carry a credit card balance from month to month, according to our Credit Card Debt Survey, followed by millennial credit cardholders:

• Gen Z credit cardholders (ages 18-27): 42 percent

• Millennial credit cardholders (ages 28-43): 53 percent

• Gen X credit cardholders (ages 44-59): 60 percent

• Baby boomer credit cardholders (ages 60-78): 48 percent

Meanwhile, Gen Z and millennial credit cardholders are less likely to have been in credit card debt for at least a year compared to older generations:

• Gen Z credit cardholders: 51 percent

• Millennial credit cardholder: 58 percent

• Gen X credit cardholders: 61 percent

• Baby boomer credit cardholders): 65 percent

A record-high percentage of Americans have more credit card debt than savings

Key insights from Bankrate's 2024 Emergency Savings Report

• 36% of U.S. adults have more credit card debt than emergency savings.

• 36% of U.S. adults are prioritizing both debt repayment and building emergency savings, as opposed to just focusing on one.

Having an emergency fund with at least three months of expenses saved is a vital resource in case of a job loss or unexpected bill, but 36 percent of U.S. adults have more credit card debt than emergency savings, according to our Emergency Savings Report. That’s a record-high percentage — the highest (tied with last year) since Bankrate began asking the question in 2011. Additionally, 54 percent of U.S. adults have more in their emergency fund or savings, and 10 percent have no credit card debt and no savings.

Compared to last year, more Americans say they want to tackle their debt in 2024. When asked to choose whether paying down debt or building emergency savings is a higher priority for them, 25 percent of people say they’re prioritizing paying down debt, up slightly from 23 percent in 2023.

This year, 36 percent said they were focused on both paying down debt and increasing emergency savings at the same time:

• Focused on both at the same time: 36 percent

• Increasing emergency savings: 28 percent

• Paying down debt: 25 percent

• Neither one is a priority: 11 percent

Credit card debt vs. emergency savings, by generation

When asked to compare their emergency savings and credit card debt, baby boomers are the most likely generation to have more in an emergency fund or savings. They’re also the least likely to have more in credit card debt.

Millennials, however, are the most likely generation to be focused on both increasing emergency savings and paying down debt at the same time.

Debt commonly negatively affects Americans’ mental health

Key insights from Bankrate’s Money and Mental Health Survey

• 47% of people who say money negatively affects their mental health, at least occasionally, cite being in debt (such as credit card debt, medical debt and student loan debt) as a reason why.

• 53% of millennials whose mental health is negatively affected by money, at least occasionally, cite being in debt as a reason why — the lowest percentage of any generation.

As a large percentage of Americans continue to carry credit card debt, 47 percent of U.S. adults say money causes a negative impact on their mental health, at least occasionally, according to our Money and Mental Health Survey. In comparison, 39 percent of people cite their own health and 38 percent cite current events (such as world news, politics, climate change, etc.).

Specifically, 47 percent of U.S. adults who say money causes a negative impact on their mental health cite being in debt — like credit card debt, medical debt or student loan debt — as a reason why. People also cited other factors that may have contributed to carrying debt, such as inflation and rising prices (65 percent) and rising interest rates (28 percent):

“When we worry about things, a lot of the time it’s because we feel out of control. Take some of that power back by putting a plan together,” Rossman says. “If you’re worried about credit card debt, sign up for a 0 percent balance transfer card to avoid interest for up to 21 months. There are plenty of things you can do to get moving in the right direction.”

People who cite debt as negatively impacting their mental health, by generation

Perhaps because they’ve had less time to accumulate debt than older generations, Gen Zers whose mental health is negatively affected by money, at least occasionally, are the least likely generation to cite being in debt (30 percent) as a reason why:

• Gen Zers: 30 percent

• Millennials: 53 percent

• Gen Xers: 50 percent

• Baby boomers: 48 percent

Many Americans would take on more debt to travel or dine out

Key insights from Bankrate's Discretionary Spending Survey

• 38% of U.S. adults are willing to go into debt for discretionary purchases this year.

• 27% of U.S. adults would go into debt this year to travel, more than live entertainment or dining out.

The demand for entertainment away from home comes even as inflation and high interest rates weaken consumers’ buying power today, according to Rossman.

“Some of that reflects a ‘you only live once’ mentality that intensified during the pandemic, and some of that is because many economic indicators — including GDP growth and the unemployment rate — are in favorable shape,” Rossman says. “But there’s a lot of inequality in the economy, and that’s very evident in these results.”

Willingness to go into debt for discretionary purchases, by generation

Millennials and Gen Zers are far more likely than older generations to go into debt for these discretionary purchases. Notably, 35 percent of millennials would go into debt this year to travel:

Many people are focusing on credit card rewards even as they carry a balance

Key insights from Bankrate's Chasing Rewards in Debt Survey

• 67% of Americans with credit card debt make an effort to maximize credit card rewards.

• 75% of Americans who typically pay their credit cards in full make an effort to maximize credit card rewards.

Despite the high percentage of people who carry a balance on their credit cards, the majority of people are chasing credit card rewards. One-third (33 percent) of credit cardholders say they make every effort to maximize credit card rewards and 39 percent say they make some effort, according to our Chasing Rewards in Debt Survey.

Despite not having their cards paid off, 67 percent of people who carry a balance on their credit cards make an effort to maximize credit card rewards, at 27 percent making “every effort” and 40 percent making “some effort.” Over 1 in 3 (33 percent) credit cardholders who carry a balance make no effort to maximize credit card rewards.

Flashy rewards are a big incentive to use credit cards, but Rossman believes people who take on debt to collect rewards aren’t using their cards wisely.

Credit cardholders who maximize rewards, by generation

Gen Z credit cardholders are the most likely generation to put in some effort to maximize credit card rewards. Gen X and baby boomer credit cardholders are tied as the generations most likely to make no effort to maximize credit card rewards at all.

The bottom line

If you’re one of the millions of Americans carrying credit card debt from month to month, you may already know that paying it down can be an exhausting, uphill battle. While credit card debt is nothing to be ashamed of, it’s vital you make a plan to pay it off. Otherwise, high interest could cause your debt to spiral out of control.

Set aside a portion of your discretionary budget to pay more than the minimum on your credit card every month. If your budget is tight, you may need to get creative. Funnel any extra funds, like from a side hustle, work bonus or tax refund, towards credit card debt, and see where you can cut back in other categories in your budget. Any amount you can spare over your minimum will put you one step closer to paying off that debt for good.

You have different methods at your disposal to tackle your debt depending on what works best for you. If you have debt with very high interest rates (such as credit card debt), consider the debt snowball payoff method, where you pay your highest-interest debts first to avoid paying more in the long run. Or, if you need a motivational boost, you can pay your smallest debts first and work your way up to your largest debts, a method called the debt snowball.

Another strategy is a 0 percent balance transfer card, which allows you to move your balance to a new card with 0 percent interest for a limited time, often 12 to 21 months. You can use that time to aggressively pay down your principal without worrying about racking up additional interest.

No matter what strategy you choose, paying off debt is something to celebrate. Congratulate yourself on the win and know you’re one step closer to financial freedom.

Methodology

Bankrate commissioned YouGov Plc to conduct the survey on credit card balances. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,350 U.S. adults, including 2,437 cardholders, of whom, 930 carry a balance on their credit card(s). Fieldwork was undertaken between June 24–26, 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

The study on credit card debt and emergency savings was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from January 19 – January 21, 2024 among a sample of 1031 respondents. The survey was conducted via web (n=1001) and telephone (n=30) and administered in English (n=1005) and Spanish (n=26). The margin of error for total respondents is +/- 3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.

Bankrate commissioned YouGov Plc to conduct the survey on money and mental health. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,364 adults, of whom 1,109 have concerns over money which impact their mental health. Fieldwork was undertaken between 18th – 20th March 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

Bankrate commissioned YouGov Plc to conduct the survey on discretionary spending. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,276 US adults. Fieldwork was undertaken between 4th – 6th March 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

Bankrate commissioned YouGov Plc to conduct the survey on credit card rewards. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,239 adults, of whom 1,740 were credit cardholders. Fieldwork was undertaken between 24th – 26th January 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.