Here's How Your Credit Card Debt Stacks Up to the Average American


A green background with jester cap logos and a credit card image overlayed
A green background with jester cap logos and a credit card image overlayed

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Owing money on credit cards is costly. According to the Federal Reserve Bank of St. Louis, the average interest rate was 21.59% as of February 2024.

Credit card debt is also pretty normal. In fact, data shows many consumers owe money to creditors and have charged a good amount on their cards. To help you understand how what you personally owe compares to your peers (and how to cope), let's dive into the details.

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This is how much the average American owes on a credit card

According to data from the credit bureau Experian, the average credit card balance among consumers in the third quarter of 2023 was $6,501. This was a 10% increase compared to the year before. Collectively, Americans carrying these balances owe close to $1.07 trillion in total.

Carrying a $6,501 balance can be pretty costly. At the 21.59% average credit card interest rate, someone making 2% minimum payments on a balance of this size would have a monthly payment of $130.02. They would take more than 30 years to become debt-free by paying only the minimum, and would pay a grand total of $36,610.75 before the card was fully paid off.

Unfortunately, not only does the typical American owe a lot of money to creditors, but they're also using a pretty large percentage of their available credit. In fact, Experian's data showed that the average credit utilization ratio in the U.S. is 29%. Credit utilization ratio is measured by calculating credit used vs. credit available. If it's above 30% -- which the typical American is really close to -- this can hurt your credit score.

What should you do if your credit card debt or utilization ratio is too high?

If you're like your peers and owe a lot of money on a card -- especially relative to the card's limit -- you should know your situation is normal. But that doesn't mean it's great.

If you stick with the status quo, you could be in debt for a long time to come and could find fewer affordable borrowing options in the future if your credit score is damaged by a high utilization rate.

You don't have to stick with the status quo, though. You can take control of your debt situation. You can do this by:

  • Exploring refinancing options. You could potentially get a personal loan and use it to pay off your credit cards. If the rate on your loan is lower, this would make debt payoff more affordable. A balance transfer card could also allow you to reduce your interest rate to 0% during a promotional period that usually lasts 12 to 15 months. Both of these options aren't a substitute for debt payoff, but they make payoff easier.

  • Develop a payment plan. Get serious about trying to repay what you owe ASAP. If you can make large extra payments toward your card balance, you'll become debt-free way faster. All the extra you pay should go toward reducing your principal balance. Consider taking on a temporary side hustle -- all the cash you earn (less taxes) can go toward your debt.

  • Make a plan for future credit card use. You don't want to get out of debt only to find yourself struggling with it again. Make a detailed budget to live on so you can ensure you're able to pay off your card in full each month. And be careful to avoid charging more purchases on a card that already has a high utilization rate.

By taking these steps, you can make a meaningful change to your debt. If you have more credit card debt than your peers, it's important to address it -- or risk paying a lot of interest over time.

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