Credit Card Debt in America

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Nov 23, 2024

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According to the Federal Reserve Bank of New York, as of quarter three in 2024, household debt for Americans has reached an all time high of $17.94 trillion. Credit card balances alone are up 8.1% from where they were a year previously. Average American debt has grown $3.8 trillion since just before the 2019 pandemic recession. These numbers paint a picture of the average American household using debt to afford everyday living costs, while inflation and stagnant wages eat away at affordability.

In this article

Total debt by generation

Here is a breakdown of the total debt by generation:

Age group (2023)*	Amount
Gen Z (18-26)	$29,820
Millennials (27-42)	$125,047
Gen X (43-58)	$157,556
Baby Boomers (59-77)	$94,880
Silent Generation (78+)	$38,600

*Statista

Debt is a normal part of society and has been for every generation. It allows people to afford healthcare, education, transportation and housing—without having the entirety of the funds. Debt can be helpful leveraged when used appropriately. Delinquency rates for credit card accounts in quarter three of 2024 are 3.23%. While that may seem low, it’s almost doubled from 2021.

What kind of debt does the average American have?

Mortgage debt makes up $12.98 trillion of the overall debt, while the remaining $4.96 trillion comes from other types of household debt. For most people, their mortgage balance makes up the majority of their debt. Housing is the biggest expense for households, so it makes sense that your home would also be the largest portion of your debt. Outside of housing debt, families are still carrying significant balances, especially when it comes to credit cards.

Source of Debt breakdown, outside of mortgages (Q1 2024)	Debt percentage
Credit Cards	28%
Car Loans	13%
Personal Student Loan	8%
Medical Debt	7%
Educational debt for children/family members	5%
Caring for loved ones	3%
No debt	34%

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Who’s borrowing the most money?

Your credit score reflects your debt management skills. Credit scores are based on several factors, which are weighted based on importance. Your credit report shows your credit score, along with a list of past credit accounts and current creditors. Here is how your credit score is calculated:

Payment history (35%)
Revolving balance (30%)
Age of credit (15%)
Credit mix (10%)
New credit inquiries (10%)

Credit cards are a type of revolving debt. Unlike installment loans, like a mortgage or auto loan, credit card balances can increase or decrease rapidly from month to month. Your credit balance makes up a large portion of your credit score. Keeping your credit card balances below 30% utilization can positively impact your credit score. Lenders want to see you using your credit lines, but not maxing out your consumer credit lines.

Here’s a breakdown of the average credit card debt for Americans according to their credit score.

Consumer Debt Breakdown by Credit Score (2023)*	Amount
300-579 (Poor)	$43,584
580-669 (Fair)	$68,020
670-739 (Good)	$94,836
740-799 (Very good)	$108,043
800-850 (Excellent)	$158,839

*Experian

The better you are at managing credit, the easier it is to obtain lines of credit. It is slightly surprising that borrowers who have the best credit scores carry the highest overall debt balances. This may be due to increased opportunity to borrow. Regardless of credit score, credit card balances saw a total growth of 17.4% in 2023, according to Experian.

Is carrying credit card debt normal in America?

50% of credit card holders carry debt from month to month. That is the highest rate since the pandemic in March 2020 when 60% of cardholders carried balances. Every generation seems to be touched by debt. It’s not until you reach Boomer age that the percentage of people carrying debt starts to drop.

Carrying Credit card balances month to month by generation
Gen Z	42%
Millennials	53%
Gen X	60%
Baby Boomers	48%

It’s not shocking that the majority of millennials and Gen X are carrying credit card debt month to month. These generations are in the middle of raising kids, buying houses, paying student loans, and caring for aging parents. Generation Z may have student debt, but the majority of that generation don’t have a mortgage balance or children yet. Gen Z makes up only 3% of homebuyers. The Boomer generation is retired, or heading that direction. Their debt relief is likely coming from reduced financial obligations or income changes as they are advancing in careers, heading into retirement, and beginning to collect Social Security.

Getting out of debt

With the average credit card debt for American families sitting at $7,236, it might be time to start looking at how to get out of debt. There are many routes to take when paying off debt. The snowball method is a popular choice for where you start by paying off the account with the lowest balance first, regardless of the interest rates. Debt consolidation or debt relief programs can be helpful for those with high interest rates or people struggling to make monthly payments. For the average American with credit card debt, HELOC, auto loans, medical debt, and/or student debt, you can make a plan to start tackling your debt, one repayment at a time.

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The bottom line

As of recent years, the debt balances according to the Federal Reserve are at an all time high. If you’re one of the millions of Americans with credit card debt—you can find comfort knowing you are not alone in this journey. Many families are turning to credit cards to offset their living expenses during this economic climate. Paying off debt requires commitment, but can ultimately lead to financial freedom.

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Holly is a freelance writer who recognizes that there isn’t a one-size-fits-all approach to personal finance. She is passionate about entrepreneurship, women in business and financial literacy. When she is not working, she is testing out new recipes, tasting the newest Trader Joe’s finds or binging the latest true crime podcast. She resides in Utah with her husband, two daughters and dog, Max.

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