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If you have a credit card or two in your wallet, you're not alone. There is over $756 billion in outstanding credit card debt in the U.S., and approximately 95% of adults have a credit card account open in their name, according to Experian data from the third quarter (Q3) of 2020.
Though consumers saw an unprecedented drop in their credit card balances in 2020—the average owed decreased by 14%—credit cards still remain the most popular form of debt. Among credit card carriers, 75% have a card balance that's greater than $0, and the average balance held was $5,315 in Q3 2020.
Since the onset of the COVID-19 pandemic earlier this year, mandatory lockdowns and widespread unemployment have altered consumer spending, likely contributing to the decrease in credit card debt. And while balances are low now, as the economy begins to recover, it's likely balances will begin to increase.
Average American Credit Card Debt by Generation
Though members of all generations carry credit card debt, some have more than others. Like other debts, credit card balances tend to increase as people grow older—peaking around the early 50s before tapering off as a person ages.
Following that pattern, members of Generation X—which includes people ages 40 to 55—have the highest debt of any generation, carrying an average credit card balance of $7,155, according to Experian data from Q3 2020.
Generation Z adults—the youngest age group in our analysis, consisting of people ages 18 to 23—have the lowest debt, with an average credit card balance of $1,963. Their average balance has seen the smallest decrease since last year, dropping just 6%.
- Generation Z (18-23): $1,963 (down 6% from 2019)
- Millennials (24-39): $4,322 (down 11% from 2019)
- Generation X (40-55): $7,155 (down 12% from 2019)
- Baby Boomers (56-74): $6,043 (down 12% from 2019)
- Silent Generation (75+): $3,77 (down 16% from 2019)
Overall, members of the older generations reduced their debt more than younger Americans. The silent generation—the oldest generation in our analysis—saw a 16% drop since 2019.
Top 10 States With the Most Credit Card Debt
Credit card balances vary around the country, and consumers in 35 states carry an average balance that is less than the national average of $5,315. In the remaining 16 states—including the 10 listed below—consumers owe more than the national average.
Alaskan consumers owed the most in 2020, carrying an average credit card balance of $6,617, according to Experian. Their balance is $1,302 less than the national average. On the opposite end of the spectrum, consumers in Iowa carried the lowest average credit card debt of $4,289—$1,026 less than the national norm.
Here is an overview of the top 10 states (including Washington, D.C.) where consumers carried the highest credit card debt as of Q3 2020:
- Alaska: $6,617
- Connecticut: $6,040
- Virginia: $5,992
- New Jersey: $5,978
- Maryland: $5,977
- Texas: $5,848
- Georgia: $5,693
- District of Columbia: $5,671
- Florida: $5,623
- Hawaii: $5,614
Tips for Getting Rid of Credit Card Debt
Regardless of whether you carry more or less credit card debt than the national average, there are plenty of ways to gain control over what you owe. Paying down credit card debt is not only a smart financial decision, but it could have a big positive impact on your credit score.
To get started, consider these strategies for reducing credit card balances:
- Figure out how much you owe. Knowing what you owe across all your credit card accounts is the first step to tackling your debt. Tally all your outstanding balances and add them together. Having this figure will allow you to plan accordingly. To get an overall look at your credit situation, you might consider reviewing your credit reports, which you can get for free from all three consumer credit bureaus through AnnualCreditReport.com.
- Make a repayment plan. Once you know what you owe, figure out how much you can afford to put toward your debt each month. If possible, find ways to put aside extra money each month so you can put it toward your debt as you work to repay what you owe. Before you start paying it back, find out which cards have the highest interest rates and put your efforts into paying that account off. Remember, the higher the interest, the more you'll pay to borrow—so eliminating high-interest balances first could help you save in the long run.
- Consider alternatives. Depending on what you owe and how much you can afford to pay each month, you may want to consider a repayment alternative. Consolidating your debt with a personal loan is an example of an alternative that could save you some money on interest over time. You could also consider transferring your balance to a card with an introductory 0% interest rate that will eliminate your interest payment and give you some extra wiggle room as you pay back the debt.
To get an idea of how much you owe, consider getting a free copy of your credit reports and scores from Experian to see which creditors you have a balance with. This will help you get an initial idea of what's outstanding, and will help you stay organized while you work to repay your debts.