You Won't Believe How Much Credit Card Debt the Average American Has


A person with facial hair sorts through bills at the kitchen table with a neutral expression.
A person with facial hair sorts through bills at the kitchen table with a neutral expression.

Image source: Getty Images

Take care when using credit cards. Only use them for purchases you can afford, and pay off your statement balance every month. Otherwise, you'll be charged interest fees. These can add up fast, resulting in costly credit card debt.

Unfortunately, credit card debt is a growing problem for many Americans. Let's explore how much credit card debt the average American has and discuss the best strategies to tackle this type of debt.

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The average credit card balance is $6,501

A recent The Motley Fool Ascent research study examined the average American household's debt. Unsurprisingly, many Americans have debt. According to data from Experian, the average credit card balance in the third quarter of 2023 was $6,501, up from $5,910 in 2022. These figures show that credit card debt is a growing issue for many American households.

Delinquent payments are also a growing problem

In addition to increasing credit card balances, increased delinquent payments are another trend. The same study examined delinquency rates for payments that were at least 30 days past due. The Federal Reserve found that in Q4 of 2023, the delinquency rate for credit card loans for commercial banks was 3.1% -- up from 2.98% in Q3 of 2023.

Paying your bills, including your credit cards, on time every month is essential. Paying late could negatively impact your credit score and your finances overall. Once a payment is at least 30 days past due, it can show on your credit report.

Additionally, the biller can charge late fees, which can be especially costly for credit cards.

Always pay your bills on time to avoid late fees and negative marks on your credit report. To avoid forgetfulness, consider setting up automatic payments through your credit card issuer.

How to tackle credit card debt

If you have credit card debt, you're not alone. But don't feel discouraged. It's possible to eliminate your debt. Here are two strategies that can help you tackle this debt faster.

Pay more than the minimum amount due

Your credit card statement will list the total balance and the minimum amount due. If you only make the minimum payment, you'll continue to be charged interest on any debt you carry, and your debt will grow quickly. Be sure to pay more than the minimum payment amount due.

Paying more toward the credit card with the highest interest rate can save you money on interest charges in the long run. But always pay at least the minimum amount due on every card. Write down the balance for each card and each card's interest rate to make a payoff plan.

Save on interest with a balance transfer credit card

Using a balance transfer credit card can help you pay off debt sooner. Many of the best balance transfer credit cards offer introductory 0% APR on balance transfers. You'll be charged a balance transfer fee (typically 3% to 5%) on the total amount transferred, but you can avoid additional interest charges during the promotional period -- which can offer big savings.

Many cards offer 0% interest for 15 to 18 months, making it easier to pay off debt quickly. However, you must pay the entire balance before the promotional period ends to avoid interest charges on your remaining debt.

Here's an example of how you could pay off your credit card debt faster: Let's imagine you transfer $5,000 worth of debt to a balance transfer card offering 0% interest for 15 months. If the credit card company charges a 5% balance transfer fee, your total new balance will be $5,250.

By paying $350 each month for 15 months, you will avoid additional interest fees and pay off all your debt. A balance transfer card may be helpful if you have significant credit card debt.

Don't give up hope

It's important to remain hopeful throughout your debt payoff journey. If you stay committed and continue to make an effort to tackle your debt, you can get out of debt. Using one of the best debt payoff apps can help you stay focused and track your progress. I believe in you.

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