Americans have a love-hate relationship with their credit cards. Though many people try their best to pay their cards off in full, a large percentage of American credit cardholders are carrying a balance from month to month. Along with that, keeping a credit card balance is more costly now than it has been in decades.
Between March 2022 and July 2023, the Federal Reserve steadily raised its federal funds rate, and since then, the national average APR has been at record highs. In other words, Americans taking on credit card debt today will pay much more in interest than they would have on that same debt only a few years ago.
Bankrate conducted several surveys with polling agencies YouGov Plc and SSRS in the last year to keep up with the country’s changing credit card habits. In each poll, Bankrate surveyed over 2,000 Americans over the age of 18 on topics like credit card usage, how long they’ve maintained a balance and if they’re prioritizing paying down that balance.
The resulting data, weighted to represent all U.S. adults, shines a light on Americans’ struggles with credit card debt. More than 2 in 5 (44 percent) American credit cardholders carry a credit card balance from month to month, as of January 2024, according to Bankrate’s Chasing Rewards in Debt Survey. In November 2023, 39 percent of U.S. adults with a balance on their credit cards said they had carried that balance for more than two years, according to Bankrate’s Credit Card Debt Survey.
Read on for a snapshot of Americans’ attitudes and habits on credit card debt. Bankrate will update this page throughout the year with the latest data exploring how people are approaching debt and credit cards.
Over the past two years, Americans’ credit card balances have skyrocketed 32 percent, according to the New York Fed. It’s no wonder, then, that we’re seeing more people carrying more debt for longer periods of time.
— Ted Rossman, Bankrate Senior Credit Card Analyst
Key takeaways from this report
- 44% of credit cardholders say they carry card balances from month to month, according to Bankrate’s Chasing Rewards in Debt Survey.
- 36% of U.S. adults have more credit card debt than emergency savings, according to Bankrate’s 2024 Emergency Savings Report.
- 38% of U.S. adults are willing to go into debt for discretionary purchases this year, according to Bankrate’s Discretionary Spending Survey.
- 67% of Americans with credit card debt still make an effort to maximize credit card rewards, according to Bankrate’s Chasing Rewards in Debt Survey.
Credit cardholders are frequently carrying balances, often for more than 2 years
Key Bankrate insights on credit card balances
- 44% of credit cardholders say they carry card balances from month to month, according to our Chasing Rewards in Debt Survey.
- 19% of U.S. adults with a balance on their credit card have had that balance for between one and two years, according to our Credit Card Debt Survey.
Personal finance experts recommend paying your credit card in full every month to avoid high interest rates on your purchases. But in practice, a growing percentage of Americans carry a credit card balance, and many have been in debt for years. The majority (54 percent) of U.S. adults who carry a balance on their credit cards have had the balance for less than two years, according to our Credit Card Debt Survey.
Keep in mind:
American credit cardholders who carry a balance often do so due to unexpected or emergency expenses. That’s the most common reason, at 43 percent, according to our Credit Card Debt Survey.
Most commonly, 19 percent said they’ve had it for between one to two years. Nearly 1 in 5 (17 percent) credit card debtors have had a balance for more than five years:
Source: Bankrate survey, November 28-30, 2023
Notes: Among U.S. adults who carry a balance on their credit card(s); Percentages don’t total 100 due to rounding.
Nearly 1 in 2 (47 percent) U.S. adults who carry a balance on their credit cards have a plan to pay off their credit card debt. Others, however, feel less prepared: 22 percent feel overwhelmed by their credit card debt and 16 percent are worried they may not be able to make their minimum credit card payments at some point in the next six months.
Pay off your credit card debt
Starting to pay off credit card debt aggressively isn’t easy. These payoff strategies give you a place to start.
How to pay off credit card debt
“If you have the average credit card balance and you only make minimum payments at the average rate, as of April 2024, you’ll be in debt for more than 18 years and you’ll owe more than $9,500 in interest. It’s so important to come up with a better payoff plan,” Bankrate Senior Industry Analyst Ted Rossman says.
For those struggling to pay off their debt, Rossman often suggests a 0 percent balance transfer card, which will allow cardholders to focus on chipping down their balance, without paying a high interest rate.
“If you have credit card debt — and no shame, a lot of people do — it’s important to prioritize your interest rate,” Rossman says.
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Gen X credit cardholders are the most likely generation to carry a credit card balance from month to month, according to our Chasing Rewards in Debt Survey, followed by baby boomer credit cardholders:
- Gen Z credit cardholders (ages 18-27): 36 percent
- Millennial credit cardholders (ages 28-43): 42 percent
- Gen X credit cardholders (ages 44-59): 52 percent
- Baby boomer credit cardholders (ages 60-78): 45 percent
A record-high percentage of Americans have more credit card debt than savings
Key insights from Bankrate’s 2024 Emergency Savings Report
- 36% of U.S. adults have more credit card debt than emergency savings.
- 36% of U.S. adults are prioritizing both debt repayment and building emergency savings, as opposed to just focusing on one.
Having an emergency fund with at least three months of expenses saved is a vital resource in case of a job loss or unexpected bill, but 36 percent of U.S. adults have more credit card debt than emergency savings, according to our Emergency Savings Report. That’s a record-high percentage — the highest (tied with last year) since Bankrate began asking the question in 2011. Additionally, 54 percent of U.S. adults have more in their emergency fund or savings, and 10 percent have no credit card debt and no savings.
Source: Bankrate
Note: Percentages don’t total 100 due to rounding.
Compared to last year, more Americans say they want to tackle their debt in 2024. When asked to choose whether paying down debt or building emergency savings is a higher priority for them, 25 percent of people say they’re prioritizing paying down debt, up slightly from 23 percent in 2023.
This year, 36 percent said they were focused on both paying down debt and increasing emergency savings at the same time:
- Focused on both at the same time: 36 percent
- Increasing emergency savings: 28 percent
- Paying down debt: 25 percent
- Neither one is a priority: 11 percent
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When asked to compare their emergency savings and credit card debt, baby boomers are the most likely generation to have more in an emergency fund or savings. They’re also the least likely to have more in credit card debt.
We asked: Which is higher — your credit card debt or the money you have in your emergency fund or savings account?
Gen Zers (ages 18-27) Millennials (ages 28-43) Gen Xers (ages 44-59) Baby boomers (ages 60-78) Amount in emergency fund or savings 49% 46% 47% 68% Credit card debt 32% 46% 47% 24% I have no credit card debt and no savings 20% 9% 6% 8% Source: Bankrate survey, January 19-21, 2024
Note: Not all percentages total 100 due to rounding.Millennials, however, are the most likely generation to be focused on both increasing emergency savings and paying down debt at the same time.
We asked: Which is a higher priority right now for you?
Gen Zers (ages 18-27) Millennials (ages 28-43) Gen Xers (ages 44-59) Baby boomers (ages 60-78) Focused on both at the same time 33% 43% 38% 31% Increasing emergency savings 27% 29% 22% 30% Paying down debt 28% 22% 31% 21% Neither one is a priority 12% 6% 9% 18% Source: Bankrate survey, January 19-21, 2024
Note: Not all percentages total 100 due to rounding.
Many Americans would take on more debt to travel or dine out
Key insights from Bankrate’s Discretionary Spending Survey
- 38% of U.S. adults are willing to go into debt for discretionary purchases this year.
- 27% of U.S. adults would go into debt this year to travel, more than live entertainment or dining out.
Despite the rising percentage of people already in credit card debt, Americans say they’re willing to go into debt for the sake of experiences this year. Nearly 2 in 5 (38 percent) U.S. adults are willing to go into debt to travel, dine out or see live entertainment, according to our Discretionary Spending Survey. The highest percentage of people would be willing to take on debt to travel, at 27 percent, followed by dining out (14 percent) and live entertainment (13 percent):
Source: Bankrate survey, March 4-6, 2024
Note: Respondents could select more than one option.
The demand for entertainment away from home comes even as inflation and high interest rates weaken consumers’ buying power today, according to Rossman.
“Some of that reflects a ‘you only live once’ mentality that intensified during the pandemic, and some of that is because many economic indicators — including GDP growth and the unemployment rate — are in favorable shape,” Rossman says. “But there’s a lot of inequality in the economy, and that’s very evident in these results.”
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Millennials and Gen Zers are far more likely than older generations to go into debt for these discretionary purchases. Notably, 35 percent of millennials would go into debt this year to travel:
We asked: For which, if any, of the following purchases would you be willing to take on debt in 2024?
Purchase Gen Zers (ages 18-27) Millennials (ages 28-43) Gen Xers (ages 44-59) Baby boomers (ages 60-78) Travel 30% 35% 23% 22% Live entertainment (e.g. concerts, sporting events, theater performances, etc.) 22% 23% 7% 4% Dining out 22% 23% 9% 8% None of these 47% 49% 70% 74% Source: Bankrate survey, March 4-6, 2024
Note: Respondents could select more than one option.
Many people are focusing on credit card rewards even as they carry a balance
Key insights from Bankrate’s Chasing Rewards in Debt Survey
- 67% of Americans with credit card debt make an effort to maximize credit card rewards.
- 75% of Americans who typically pay their credit cards in full make an effort to maximize credit card rewards.
Despite the high percentage of people who carry a balance on their credit cards, the majority of people are chasing credit card rewards. One-third (33 percent) of credit cardholders say they make every effort to maximize credit card rewards and 39 percent say they make some effort, according to our Chasing Rewards in Debt Survey.
Despite not having their cards paid off, 67 percent of people who carry a balance on their credit cards make an effort to maximize credit card rewards, at 27 percent making “every effort” and 40 percent making “some effort.” Over 1 in 3 (33 percent) credit cardholders who carry a balance make no effort to maximize credit card rewards.
Source: Bankrate survey, January 24-26, 2024
Note: Not all percentages total 100 due to rounding.
Flashy rewards are a big incentive to use credit cards, but Rossman believes people who take on debt to collect rewards aren’t using their cards wisely.
Chasing rewards while you’re in debt is a big mistake. It doesn’t make sense to pay 20 percent or more in interest just to earn 1, 2 or even 5 percent in cash back or airline miles.
— Ted Rossman, Bankrate Senior Credit Card Analyst
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Gen Z credit cardholders are the most likely generation to put in some effort to maximize credit card rewards. Gen X and baby boomer credit cardholders are tied as the generations most likely to make no effort to maximize credit card rewards at all.
We asked: Which, if any, of the following best describes your credit card rewards strategy?
Gen Z cardholders (ages 18-27) Millennial cardholders (ages 28-43) Gen X cardholders (ages 44-59) Baby boomer cardholders (ages 60-78) I make every effort to maximize credit card rewards 35% 36% 31% 30% I make some effort to maximize credit card rewards 42% 38% 39% 39% I make no effort to maximize credit card rewards 23% 26% 31% 31% Source: Bankrate survey, January 24-26, 2024
Note: Not all percentages total 100 due to rounding.
The bottom line
If you’re one of the millions of Americans carrying credit card debt from month to month, you may already know that paying it down can be an exhausting, uphill battle. While credit card debt is nothing to be ashamed of, it’s vital you make a plan to pay it off. Otherwise, high interest could cause your debt to spiral out of control.
Set aside a portion of your discretionary budget to pay more than the minimum on your credit card every month. If your budget is tight, you may need to get creative. Funnel any extra funds, like from a side hustle, work bonus or tax refund, towards credit card debt, and see where you can cut back in other categories in your budget. Any amount you can spare over your minimum will put you one step closer to paying off that debt for good.
Learn how to pay off your credit card debt
You have different methods at your disposal to tackle your debt depending on what works best for you. If you have debt with very high interest rates (such as credit card debt), consider the debt snowball payoff method, where you pay your highest-interest debts first to avoid paying more in the long run. Or, if you need a motivational boost, you can pay your smallest debts first and work your way up to your largest debts, a method called the debt snowball.
Another strategy is a 0 percent balance transfer card, which allows you to move your balance to a new card with 0 percent interest for a limited time, often 12 to 21 months. You can use that time to aggressively pay down your principal without worrying about racking up additional interest.
No matter what strategy you choose, paying off debt is something to celebrate. Congratulate yourself on the win and know you’re one step closer to financial freedom.
Next in this series: Bankrate’s newest data on debt and mental health will come out in May. Check back here for the latest data to stay informed on the state of American credit card debt.
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Bankrate commissioned YouGov Plc to conduct the survey on credit card balances. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,350 U.S. adults, including 1,796 cardholders and 873 who carry a balance on their credit card(s). Fieldwork was undertaken between November 28–30, 2023. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
The study on credit card debt and emergency savings was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from January 19 – January 21, 2024 among a sample of 1031 respondents. The survey was conducted via web (n=1001) and telephone (n=30) and administered in English (n=1005) and Spanish (n=26). The margin of error for total respondents is +/- 3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
Bankrate commissioned YouGov Plc to conduct the survey on discretionary spending. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,276 US adults. Fieldwork was undertaken between 4th – 6th March 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
Bankrate commissioned YouGov Plc to conduct the survey on credit card rewards. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,239 adults, of whom 1,740 were credit cardholders. Fieldwork was undertaken between 24th – 26th January 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
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