Average Credit Card Debt in America 2019 - Elite Personal Finance
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Average Credit Card Debt in America 2019

EPF Last Update: March 31, 2019
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As American credit card debt continues to skyrocket, the numbers paint a troubling portrait.

Currently sitting at 799 billion, US credit card debt has been on a seven-year ascension, surpassing the highs we saw during the 2008 financial crisis.

Using data from the latest December, 2018 Experian: State of Credit Cards study as well as February, 2019 data from the US Federal Reserve, we have the most up-to-date statistics to help make sense of the current borrowing environment.

Average Credit Card Debt in America 2019: Statistics and Key Findings

Total US consumer debt currently sits at over 4 trillion and has increased nearly 21% over the last four years. Total revolving debt is 1.446 trillion and has increased 17% over the last four years.

Our analysis estimates that FDIC-Insured Commercial Banks and Savings Institutions earned roughly 108 billion in credit card interest in 2018 – an increase of 16 billion compared to 2017.

According to the Federal Reserve Survey of Consumer Finances – American households carried an average credit card debt balance of $5,700 and a median credit card debt balance of $2,300.

Credit card debt in America currently sits at 799 billion – an increase of 42% since 2011.

Borrowers own an average of 2 ½ credit cards and carry an average balance of $4,293 per card. As well, 59.4% of consumers own at least one credit card – an increase of 3% year-over-year.

At the state-level, total credit card debt has increased anywhere from 1.7% to 8.5%, with Nevada (8.5%), Florida (7.9%) and Georgia/South Carolina (7.6%) showing the largest percentage increases. Conversely, Alaska (1.7%), Vermont (3.0%) and Rhode Island/New Mexico/West Virginia (3.2%) saw the smallest percentage increases.

As of 2018:Q4, national credit card delinquency rates sit at 2.54% – a steady rise since bottoming in 2015:Q1 (2.12%). At the state-level, Arizona (2.32%), Mississippi (2.21%) and Nevada (2.10%) have the highest percentage of delinquent accounts, while Washington (1.01%), Alaska (1.06%) and Utah (1.08%) have the lowest percentage of delinquent accounts.

Borrowers aged 45 – 54 have the highest average credit card debt, while borrowers > 75 have the lowest average credit card debt.

The statistics show a high correlation between average credit card debt and average income. The higher one’s income, the higher one’s average credit card debt.

American Men ($7,407) have higher average credit card debt than women ($5,245)

Whites ($7,942) have the highest average credit card debt, while Blacks ($6,172) have the lowest average credit card debt.

Average Credit Card Debt in America 2019: Charts, Graph, Analysis

Total American Credit Card Debt

Total US Consumer Debt Graph

When analyzing the graph below, you can see total American credit card debt has been on a seven-year upward trend, increasing over 42% since 2011. Currently sitting at 799 billion, the statistics confirm that borrowers have become increasing comfortable relying on debt to finance their lifestyle.

Year: Total Credit Card Debt (Billions):
2008 732
2009 686
2010 597
2011 562
2012 594
2013 599
2014 626
2015 649
2016 698
2017 756
2018 799

Total American Credit Card Debt

But is this a trend we should be proud of?

Well, considering the 2008 financial crisis brought plenty of hardship to those in Middle America, it’s troubling that borrowers aren’t heeding the warnings of the past. As American credit card debt continues to rise, destabilizing economic consequences could occur if the US economy enters another crisis period.

 

Average American Credit Card Debt:

When breaking down the numbers on an individual basis, you can see borrowers own an average of 2 ½ credit cards with balances that average $4,293 per card.

 

Overview: Value:
Average Number of Credit Cards 2.5
Average Credit Card Balance 4,293
Percentage of American that Own a Credit Card 59.4%

 

As well, 59.4% of consumers own at least one credit card – an increase of 3% compared to the same period last year.

Contrast that with the numbers from the 2016 Federal Reserve Survey of Consumer Finances. At the time, American households carried an average credit card debt of $5,700 and a median credit card debt of $2,300.

Displaying a near 25% decline in the average, aggregate numbers are moving in the opposite direction.

So what gives?

The best explanation is – at the macro-level – more Americans are using credit card debt as form of financing, however, they’re holding lower balances on a per capita basis.

 

Total US Credit Card Debt by State:

When assessing statistics at the state-level, California, Texas and Florida are the largest contributors to total American credit card debt. However, considering they also rank in the top-3 in overall population, the figures are expected.

 

What really stands out though, is every state has seen a year-over-year increase in total credit card debt – with percentages ranging from 1.7% to 8.5%.

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State: Amount (Millions): Year-Over-Year Percentage Change:
California 104,814 6.6%
Texas 66,389 6.8%
Florida 59,301 7.9%
New York 54,420 4.5%
Illinois 32,544 4.7%
Pennsylvania 31,221 4.1%
New Jersey 28,443 4.6%
Ohio 25,729 4.1%
Georgia 24,963 7.6%
Virginia 24,769 5.1%
Michigan 22,058 4.8%
North Carolina 21,860 7.0%
Washington 20,137 5.9%
Massachusetts 18,974 5.3%
Maryland 18,400 6.1%
Arizona 16,804 7.2%
Colorado 15,162 5.8%
Minnesota 13,245 4.7%
Tennessee 13,231 7.0%
Indiana 12,958 4.9%
Missouri 12,708 5.1%
Wisconsin 12,129 3.7%
Connecticut 11,104 3.6%
South Carolina 10,537 7.6%
Oregon 9,859 5.9%
Alabama 9,161 5.4%
Louisiana 8.792 5.2%
Kentucky 7,737 5.4%
Nevada 7,684 8.5%
Oklahoma 7,442 4.8%
Utah 6,476 6.1%
Kansas 6,114 4.3%
Iowa 5,949 4.3%
Arkansas 5,315 5.8%
Mississippi 4,521 5.9%
New Mexico 4,282 3.2%
Nebraska 4,004 5.2%
Hawaii 4,000 5.8%
New Hampshire 3,970 4.2%
Idaho 3,582 5.3%
West Virginia 3,249 3.2%
Maine 3,181 3.5%
Rhode Island 2,805 3.2%
Delaware 2,568 6.4%
Montana 2,395 5.2%
Alaska 2,277 1.7%
District of Columbia (DC) 1,971 5.7%
South Dakota 1,822 5.1%
North Dakota 1,675 6.2%
Vermont 1,539 3.0%
Wyoming 1,322 2.4%

 

Consistent with statistics on an aggregate level, analysis shows that Southern regions (6.9% and 6.6%) saw the highest uptick in credit card debt, with Western regions (6.3%) not far behind.

As well, Nevada (8.5%), Florida (7.9%) and Georgia/South Carolina (7.6%) saw the largest percentage increases, while Alaska (1.7%), Vermont (3.0%) and Rhode Island/New Mexico/West Virginia (3.2%) saw the smallest percentage increases.

 

US Credit Card Delinquency Rates on Aggregate and by State:

As aggregate debt levels continue to rise, delinquency rates are starting to creep up as well. A delinquent account is defined as a credit account where a borrower fails to make at least the minimum payment by the monthly due date. Balances more than 30-days past-due usually result in the lender contacting the consumer.

When analyzing data from the US Federal Reserve, delinquency rates for credit card loans across all commercial banks – as of 2018:Q4 – sit at 2.54%. Bottoming at 2.12% in 2015:Q1, delinquency rates have shown a continued uptrend, increasing nearly every quarter over the last four years.

So what about at the state-level?

While Experian defines delinquent accounts as those 90-days past-due, the trend is also similar.

Arizona (2.32%), Mississippi (2.21%) and Nevada (2.10%) have the highest percentage of delinquent accounts, while Washington (1.01%), Alaska (1.06%) and Utah (1.08%) have the lowest percentage of delinquent accounts.

You’ll notice, even the most delinquent states fall below the national average – but that’s because Experian is using a 90-day late payment threshold, whereas the Federal Reserve uses a 30-day late payment threshold.

 

Average American Credit Card Debt by Age:

As the statistics show, baby boomers have the greatest borrowing capacity. With an average credit card debt of $9,096 — individuals between the ages of 45 – 54 use credit cards more often than their peers.

Why?

Because boomers have much more disposable income.

Entering the workforce during periods of higher job security and higher rates of economic growth, borrowers in this age group were able to accumulate a greater asset-base — which allows for more debt service.

 

Age Bracket: Average Credit Card Debt:
< 35 5,808
35 – 44 8,235
45 – 54 9,096
55 – 64 8,158
65 – 69 6,876
70 – 74 6,465
> 75 5,638

Average American Credit Card Debt by Age

Millennials (< 35) and elderly (> 75) not so much.

Due to lower wages and the increasing costs of both housing and long-term care, these groups rely less on credit card debt to finance their lifestyle.

 

Average US Credit Card Debt by Income:

According to a 2016 survey of consumer finances, there is a high correlation between average credit card debt and average income – with borrowers in the lowest income brackets relying less on credit card debt than higher earning individuals.

 

Average Income: Average Credit Card Debt:
15,100 2,100
31,400 3,800
52,700 4,400
86,100 6,800
136,000 8,700
260,200 12,500

Average US Credit Card Debt by Income

 

However, interestingly enough, low-income earners pay off their credit card balances more quickly than high-earners.

Why?

Due to the high cost of borrowing as well as having less disposable income to play with, low-income borrowers tend to be more careful with timely repayment.

 

Average US Credit Card Debt by Gender:

In the battle-of-the-sexes, men tend to carry higher credit card balances than their female counterparts.

Studies show, 19% of men tend to charge in-excess of $2,000 a month to their credit cards, while only 8% of women admit to reaching this threshold.

 

Gender: Average Credit Card Debt:
Men 7,407
Women 5,245

Average US Credit Card Debt by Gender

 

A lot of this can be explained by workforce dynamics.

On average, men have higher employment earnings than women. The increased cash cushion not only increases their confidence, but also their ability to repay outstanding debt.

Conversely, women take a more conservative approach – prioritizing financial responsibility over frivolous spending.

 

Average US Credit Card Debt by Race:

Similar to the gender-related findings, race has a parallel connection with average credit card debt.

Citing data from the US Census Bureau, statistics show that Whites carry the highest average credit card debt, while Blacks carry the lowest average credit card debt.

 

Race: Average Credit Card Debt:
White 7,942
Asian 7,660
Other 7,026
Hispanic 6,469
Black 6,172

Average US Credit Card Debt by Race

 

Why the divergence?

Well first, White workers remain the largest contributors to the American labor force. Second – according to the Institute for Women’s Policy Research – White participants earn nearly $261 more in median weekly income than their Black counterparts.

The gap in wealth allows for greater borrowing capacity among White individuals and helps explain the racial differences in average credit card debt.

 

Total US Consumer Debt:

When analyzing the data on aggregate, the trends look even worse.

In the chart below, you can see how total US consumer debt has ballooned from nearly 3.3 trillion in 2014, to over 4 trillion today.

 

  2014: 2015: 2016: 2017: 2018: Dec
Revolving Debt (Billions): 889.1 907.9 969.4 1,024.0 1,044.6
Nonrevolving Debt (Billions): 2,425.4 2,505.7 2,677.8 2,807.1 2,965.5
Total Outstanding Debt (Billions): 3,314.6 3,413.6 3,647.2 3,831.2 4,010.0

* Totals may differ due to rounding

 

The statistic shows a near 21% increase in total outstanding US debt over the four-year period, with an average annual increase of nearly 4.9%.

And what role does credit cards play?

Well, revolving debt statistics are made up mainly of credit card debt. To define the term, revolving debt is a line of credit where borrowers can access funds as needed. Conversely, nonrevolving debt is an installment loan where you make predefined fixed payments. For example, a car loan is a form of nonrevolving debt.

While both have shown four-year increases of 17% and 22% respectively, the statistics are another confirmation that the US consumer has become increasingly reliant on debt financing.

 

Average Credit Card Interest Earned by American FDIC-Insured Institutions:

When analyzing balance sheet data of Federal Deposit Insurance Corporation (FDIC) member institutions, we found interesting information regarding their 2018 credit card receivables. As qualified members, all FDIC-Insured Commercial Banks and Savings Institutions have their assets and liabilities consolidated into one report to provide an overall picture of FDIC-insured loan books.

Interestingly enough – in 2018:Q4 – FDIC-Insured Commercial Banks and Savings Institutions had 903.492 billion in credit card receivables outstanding.

Now, what are credit card receivables?

Carried as assets on their corporate balance sheets, credit card receivables represent outstanding credit card loans that institutions expect to recoup and earn interest on in the future.

Detailed in the Consumer Financial Protection Bureau’s (CFPB) December, 2017 Consumer Credit Card Market Study, data revealed how roughly 29% of all credit card balances are paid in full each month. Analyzing from the opposite perspective, it implies 71% of balances rollover each month and thus generate interest for FDIC-insured institutions.

Now, considering the average credit card interest rate charged by American commercial banks – according to 2018:Q4 data from the Federal Reserve – is 16.86%, we estimate that FDIC-insured institutions earned roughly 108 billion in credit card interest in 2018.

So how does that compare to 2017?

Well, considering outstanding credit card receivables were 865.055 billion in 2017:Q4 and the average credit card interest rate was 14.99% – the spread resulted in an estimated 16 billion in 2018 excess interest earned by FDIC-insured institutions compared to 2017.

 

Most Popular Credit Cards by FICO Score:

When choosing a credit card, the higher your FICO score, the more options at your disposal. While quite predictable, those who demonstrate reliable creditworthiness have access to credit cards options with cashback rewards, travel benefits as well as Air Miles rewards.

Conversely, borrowers with low credit scores usually settle for cards with secured lines of credit.

Check out the chart below:

 

No Score 300 – 579 580 – 669 670 – 739 740 – 799 800 – 850
Airline: 0.0% 0.0% 1.3% 3.4% 3.4% 3.4%
Cashback: 0.3% 5.7% 22.7% 26.6% 26.4% 26.1%
Hotel: 0.0% 0.0% 0.9% 2.3% 2.8% 3.3%
No Annual Fee: 0.3% 29.1% 30.5% 31.1% 30.2% 28.9%
Rewards: 0.3% 7.1% 26.2% 32.3% 32.6% 32.4%
Secured Card: 99.1% 58.1% 17.2% 0.3% 0.0% 0.0%
Travel: 0.0% 0.0% 1.3% 4.1% 4.7% 6.0%

* Totals may differ due to rounding

 

As you can see, it’s extremely important it to maintain a healthy FICO score.

As you move from left to right, notice how as FICO scores increase, the percentage of secured cards decrease. As well, those with the highest credit scores are able to select cards that come with some type of rewards or no annual fee.

 

How We Conducted the Study:

Using the latest December, 2018 Experian: State of Credit Cards study as well as February, 2019 statistics from the US Federal Reserve, we first presented the data on aggregate, then broke down the numbers by state, age, income, gender, race, and in totality to present the most accurate depiction of credit card debt within America today.

 

Conclusion:

Currently sitting a 799 billion, American credit card debt has increased over 42% since 2011. While the numbers are troubling on aggregate, they don’t get much better at the individual level. Average credit card debt per card sits at $4,293 while 59.4% of consumers own at least one credit card – up 3% year-over-year.

At the state-level, every state has seen an increase in credit card debt over the last year. With percentage increases ranging from 1.7% to 8.5%, the numbers confirm the trends we’re seeing on aggregate.

Moreover, age, income, gender and race provide more predictable insights.

With baby boomers owning the largest percentage of American wealth, it’s easy to see why those in the 45 – 54 age bracket and those in higher income brackets hold larger balances of credit card debt. As well, with males commanding higher wages and Whites representing the largest labor participant-racial group within the United States – both groups use credit card debt more often than their peers.

 

Sources:

Experian: State of Credit Cards

Federal Reserve Consumer Credit Report

Elite Personal Finance

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