The average credit card debt in the U.S. is $5,525, according to the credit bureau Experian’s State of Credit 2021 report. However, the average credit card debt per person can vary greatly depending on factors such as an individual’s location and age. Economic conditions, such as the COVID-19 pandemic, also have an influence on credit card debt.
Read on for a breakdown of the average credit card debt in America, as well as some tips if you’re among those dealing with credit card debt.
Average Credit Card Debt in the US
In 2021, the average credit card holder had $5,525 worth of credit card debt, per Experian’s report. This was nearly 7% lower than the $5,897 in average credit card debt that was recorded in the same report in 2020. Overall, American’s credit card debt totaled $856 billion in the fourth quarter of 2021. This represents an increase of $52 billion from the third quarter of 2021, though it still falls below the record-high level of credit card debt reported in the fourth quarter of 2019.
Average Credit Card Debt by State
America’s credit card debt varies widely by state. For example, per Experian’s report, Wisconsin and Iowa were tied for the lowest average amount of credit card debt at $4,587. Meanwhile, Alaska had the most credit card debt at $7,089 on average.
Overall, the five states with the highest average credit card debt were the following.
On the other end of the spectrum, the states with least credit card debt were the following.
When analyzing the average credit card debt in America by state, it appears that rural states with lower incomes have the lowest level of debt, while smaller urban states with higher incomes have the most debt. The clear exception is Alaska, which has the highest level of credit card debt, perhaps because of its higher cost of living and the highly seasonal nature of the state’s economy.
Average Credit Card Debt by Age
Another way to look at credit card debt is to break it down by average credit card debt by age. Per data from Experian, credit card debt in 2021 was highest among Generation X (ages 41-56), followed by baby boomers (ages 57-75), and then millennials (ages 25-40).
Gen X has a staggering $7,070 of credit card debt on average, compared to an average of $2,282 in Generation Z (ages 18-24). Meanwhile, baby boomers have an average of $5,804 in credit card debt, while millennials have $4,576. The silent generation (ages 76+), on the other hand, has $3,177 on average in credit card debt.
What’s also notable, however, is how quickly each generation’s average credit card debt is rising. While levels of credit card debt are on the decline for Gen X, baby boomers, and the silent generation, they’re increasing for millennials and Gen Z.
COVID-19 Pandemic Effect on Credit Card Debt
Average credit card debt in the U.S. declined during the COVID-19 pandemic despite the economic challenges it brought. In 2020, when the pandemic began, the average credit card balance was $5,315. In 2021, there was a 1.8% decline, with average credit card debt levels falling to $5,221.
The Federal Reserve has attributed this decrease in credit card debt to a general decline in purchase volume as consumers stayed home and canceled plans during lockdowns. The number of debt paydowns and prepayments (one way how credit card payment works) also rose during the pandemic, which could partly be due to the economic stimulus payments that many Americans received.
3 Tips to Get Out of Credit Card Debt
While it’s interesting to learn the average amount of credit card debt in the U.S., it doesn’t help you much when you’re struggling to pay down your own credit card debt. Thankfully, there are several ways to get out of credit card debt.
1. Using Balance Transfer Credit Cards
Some credit card issuers offer new applicants 0% annual percentage rate, or APR, financing on balance transfers. This enables you to transfer existing credit card debt to a new card and gives you a break from incurring interest charges. And when you transfer balances from multiple cards, you’re consolidating your debt as well, which can make it easier to stay on top of payments since you’ll have just one instead of multiple.
Promotional APR offers last a minimum of six months and can extend up to 21 months. Just note that you’ll incur a balance transfer fee, which is typically 3% to 5% of the amount transferred. With the way credit cards work usually, the balance transfer fee is added to the balance of the new account.
The key to utilizing a balance transfer credit card is to pay a portion of your remaining balance each month before you resume swiping at places accepting credit card payments. This ensures that you have the entire balance paid off by the time the promotional rate expires and the standard rate resumes.
2. Getting a Personal Loan to Consolidate Debt
Another option to pay off credit card debt is to use a personal loan to consolidate debt. Personal loans are typically installment loans with fixed monthly payments and a fixed repayment schedule. Approval typically is based on your personal credit history and credit score.
If you have good or excellent credit (meaning 670+), you might be able to qualify for a loan with a lower interest rate than your current credit cards have. When you receive money from a personal loan, you can use it to pay off your credit card debt, which may have higher interest rates, especially if your APR is above the average credit card interest rate.
3. Receiving Credit Counseling
You could also look for a credit counseling service that can offer advice on how to manage your credit card debt and pay it off. There are non-profit credit counselors who can help you to choose from one of many possible solutions, such as credit card debt forgiveness. They can also offer general financial education, such as explanations of important credit card definitions and tips on budgeting.
Counseling can take place in person, online, or over the phone. You may be able to find non-profit credit counseling services through a university, military base, credit union, or housing authority.
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