Credit Card Debt in the United States: Trends and Issues

The average American consumer receives their first credit card aged 20. For many, it’s an exciting time, further proof they have ascended into adulthood and are ready for financial independence. 

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The delinquency rate is high on these cards, but the credit is low, often between $1,500 and $2,000, and it gives the borrower a way to improve their credit score.

It also adds another cog to the massive US debt machine, one that creates more debt, more delinquencies, and more problems than any other.
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But why is this, why is the average credit card debt so high, and can anything be done about it?

State of American Credit Card Debt

The average US debtor has over $6,500 worth of credit card debt and in total the country owes more than $1 trillion. The average credit card APR is around 18%, and if we plug these two figures into a monthly repayment calculator and suppose that the debtor seeks to clear the balance in 5 years, then the average minimum monthly repayment is close to $120 and they’ll repay over $14,000 in total.

That’s not great, but it’s not that bad either, at least not at first glance. The problem is, it supposes that the debtor will stop using all credit card accounts, accumulate no more debt, and meet all monthly repayments.
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If not, their credit score will suffer, that 5-year term will almost certainly be prolonged, and there will be serious financial implications.  

How Much Credit Card Debt Does the Average American Have?

The average credit card debt is said to be $6,506. According to data published by the Federal Reserve, store cards, which tend to have the highest rates, account for $1,901 of this total, while the average per account is $1,760. This data also tells us that the average amount spent on a card with no balance is $1,154, which means even individuals who clear their cards every month are spending in excess of $1,000 on them.

55% of Americans with credit cards have balances they don’t clear every month and credit card delinquency is increasingly common, accounting for around 2% of total credit accounts. 

Which States Have the Highest Credit Card Debt?

You might expect the highest revolving credit card debt to be in New York or California, but it’s actually in Alaska. Connecticut follows closely behind. New Jersey, Virginia, Maryland, and Hawaii are next.

It’s no coincidence that these 6 states are all ranked in the top ten for the highest household income. The cost of living is also higher than the national average. The honor of the lowest average credit card debt goes to Iowa, Wisconsin, and Mississippi, where the cost of living is around 10% less than the national average.

Which Age Groups Have the Highest Debt?

Every few years the Federal Reserve conducts a survey that looks at debt across the age groups. Generational differences seem to have been in the news a lot lately, with Millennials and Baby Boomers often occupying opposing sides. It’s true that these generations have experienced life very differently with regards to opportunities, income, and debt, but they’ll both be happy to know that they have much less debt than other generations.

In fact, the last survey conducted by the Federal Reserve found that those aged 65 to 74 ($66,000) have a similar debt to those under the age of 35 ($67,400). Adults above the age of 75 have close to half that amount Gen Xers have the highest, nearly twice as much as Millennials and Baby Boomers.

Of course, we don’t need the Federal Reserve to tell us that debt is much less likely in those aged 75 and up. They’re often retired, have paid off the mortgage and are also more likely to have been in receipt of life insurance policies and inheritances. It will come as a surprise to many, however, to know that Millennials, on average, have half the debt of the generation that came before.

US Compared to Rest of World

Americans love credit, there’s no denying that. It’s very easy to acquire large amounts of debt in this country, and it’s just as easy to find a balance transfer card, personal loan, or debt consolidation loan to help you tackle it. 

But why are things so different here when compared to the rest of the world? 

Why is this Problem Worse in the United States?

American debtors have it much worse than debtors in other countries. Debt is more common, it tends to be much higher, and it’s widespread across all demographics. 

It’s easy to understand some of the reasons behind this difference, but not all. As an example, take student loan debt, which accounts for a significant proportion of young adult debt. The average cost of education is just under $25,000 when accounting for all institutions (private schooling costs around $42,000 while public schooling is below $18,000). 

Scholarships are available and many American families save money throughout the child’s lifetime so they can cover these fees when needed. The vast majority, however, are forced to acquire student loans, which can hang over their heads for years. In many European countries, college is free, and while there are some universities that charge, the fees tend to be significantly less, and the student loan systems are also more forgiving.
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It’s the same with healthcare, which is cheap or free elsewhere, but hugely expensive in the US. However, it’s a different story with credit cards, so why is America’s average credit card debt so much higher than it is in other countries?

Why Average Credit Card Debt is Higher

There are many reasons America’s average credit card debt is higher than it is elsewhere, but the main reason is actually quite simple: American credit cards are better.

And we don’t mean that in a patriotic, “U. S. A!” way. 

Take the UK as an example, as our cousins across the pond have a very similar financial system. They have balance transfer cards, reward cards, credit scores, credit reports—they even have many of the same credit card companies that we have.

But they don’t enjoy the same freedom that Americans have when it comes to choosing a credit card. Competition isn’t as high, and rewards average a mere 0.5% cashback. US credit cards, on the other hand, offer as much as 5% through introductory offers and 1% to 2% thereafter.

The average APR is also lower here in the US, clocking in at 24.7% in the UK and less than 18% in the US. What’s more, surveys in 2018 and 2019 suggest that Americans use cash for just 14% of purchases, while in the UK it’s closer to 40%, and we know that credit leads to more impulsive purchases.

Simply put, the US is more obsessed with credit and banks, card providers, and lenders are taking advantage of that. That’s why the average credit card debt is much higher. 

Household Income vs Debt

The median household income in the US is over $62,000, but if you include student loans, credit cards, and mortgages, the average debt is close to $140,000. Take mortgages out of the equation and it drops below $40,000, but only just.
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Discretionary income is over $1,700 a month on average, but once you consider interest repayments, unexpected bills, vacations, college funds, and additional living expenses, it doesn’t leave much to clear those household debts. 

The Biggest US Credit Card Companies

The average credit card user has three cards. For most, their first card and their main card is provided by the same company that they bank with. The additional cards are reward cards and store cards as well as ones acquired solely for a balance transfer.

If you’re an average credit card user, there’s a high chance you will have at least one account with one of the following companies:


The first provider to offer a cashback scheme, Discover also has one of the best modern rewards cards. Known as the Discover It, this card rewards consumers with as much as 5% cashback.

Discover is mistakenly seen as a card that isn’t accepted in many retailer locations. However, while this may be true outside the United States, you shouldn’t have an issue using it domestically. A few years ago, a survey found that Visa and MasterCard were accepted in 9.5 million locations, while Discover was accepted in 9.3 million, just a fraction less.

American Express

American Express is one of the best providers of airmile programs and other rewards programs. It also has some of the most sought-after premium credit cards, which are offered to big spenders. 

AMEX is actually the card that is accepted the least of all major providers. The study mentioned above found just 6.9 million retailers had embraced AMEX. However, it is accepted in more international locations than Discover.

Although figures are constantly changing, the most recent estimates suggest that there are around 1 million more American Express cards than there are Discover cards in the United States.


The Chase Freedom card is the most popular credit card in the United States, offering consumers a reasonable APR as well as several perks. Chase also offers the Slate card and provides cards on behalf of several major airlines, including British Airways.

In most cases, these cards are offered only to consumers with above-average credit scores, but they are not necessarily considered premium or elite user cards.


Mastercard is not the most popular credit card in the United States. In fact, there are around 191 million users of this card and over 320 million users of the card in first place. However, it is a long way clear of the other providers on this list. If you combine all users of Chase, American Express, and Discover cards then the number you arrive at is only just higher than the number of Mastercard users.

These cards are accepted in locations across the United States and all over the world. It’s the second biggest in the US, but it’s also the second biggest pretty much everywhere else.


It’s probably no surprise to see that Visa is number 1, as this is the biggest provider not just in the United States, but all over the world. There are more Visa credit cards and debit cards in existence than any other type; it is accepted in more locations, and it’s a brand name that is as instantly recognizable as Coca Cola and Sony.

Pros and Cons of American Credit Cards


  • Multiple types of cards
  • Huge rewards
  • Many companies to choose from
  • Accepted in most outlets nationwide
  • Competitive rates
  • Options for no credit and poor credit


  • Can be too convenient
  • High-interest rates
  • Few options and high fees for consumers with bad credit

If you have a good debt-to-income ratio, a solid payment history, and you can meet your minimum payment obligations without issue, the US is a great place to acquire credit. Reward cards give you an incentive to spend, balance transfer cards allow you to move your debt around, and you get the feeling that every bank and lender wants your business and will trip over themselves to get it.

If you have none of those things, like so many millions of Americans, then it becomes a nightmare. There are debt counseling, debt settlement, and debt management services to help, but if you can’t meet your monthly payments, and you find yourself prioritizing debt repayments over food, clothing, and family days out, it can become depressing very quickly.

What Does the Future Hold?

Now we’ve looked at the current state of credit card debt in the US and have established that things look pretty bleak, that begs one question: How does the US government plan on approaching this issue?

The truth is, they’ll probably do very little. The only way to prevent those figures from rising is for American consumers to stop spending so much, but that hurts the economy. If you change the mentality of the average American consumer, focusing more on frugality and less on consumerism, the GDP takes a nosedive, the country’s biggest companies suffer, and America’s position on the world stage is notably weakened.

The world is moving away from cash and towards a completely digital payment structure. Cash will soon become a thing of the past and everything, from bills to bus fares and grocery shopping, will be purchased with credit, whether you’re using a credit card, a smartphone app, or some other new-fangled device. Once this happens, the issues facing credit card users become more pronounced and the country’s $14 trillion worth of consumer debt grows ever larger.

In simple terms, the situation will likely get worse for debtors and better for lenders, but if we continue down this road then maybe we’ll start seeing fewer punishments for credit card delinquencies and more options for struggling debtors.

There are over 100 million Americans crossing their fingers and hoping for just that.