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It's no secret that interest rates are on the rise. But Experian data shows that the average monthly payments consumers pay on their credit cards and other types of debt haven't changed significantly this year. While up in some states and for some types of debt, monthly payments overall are still lower than they were during the pandemic.
Overall Monthly Debt Payments Are Rising, but Still Below 2020 Levels
Nationally, average overall monthly payments—the sum of minimum credit card and loan payments a consumer pays each month—have trended up over the past year, but are still lower than they were before the pandemic.
|Average Monthly Debt Payments|
|Debt Type||March 2020||June 2021||June 2022||Change, March 2020-June 2022|
|Overall average debt||$1,086||$1,014||$1,055||-$31|
Source: Experian. Averages are among consumers with the type of debt.
The journey of these data points tracks with the economic changes that have occurred in the background over the past two years:
- For auto loans, inventory shortages led to consumers paying above sticker price for what few new automobiles were available this time last year, and more for used cars, which already are typically more expensive to finance than new vehicles.
- Credit card balances declined immediately at the start of the pandemic as consumers stopped spending partially or completely on many goods and services. This reduction in spending, as well as government aid in the form of stimulus checks and other benefits, helped bank balances grow. Monthly payments are on the rise—and APRs for most borrowers are climbing steadily upward—but the average is still below the $203 paid in early 2020.
- The increase in average monthly mortgage payments shouldn't come as a surprise either, as consumers scrambled to buy what inventory remained as new home construction ground to a near halt during the pandemic. However, the vast majority of these mortgages were financed before mortgage rates began to rise in late 2021—more indication that price increases, not higher mortgage rates, drove most of the increase.
Are Gas, Groceries and Utilities All Going on Credit Cards?
Credit card issuers cater to the everyday purchasing needs of consumers. Consumers often use cards to make certain purchases, such as gasoline and groceries, especially if they can earn rewards by doing so. And with inflation impacting these basic goods much more sharply than other expenses, one might expect credit card balances, and monthly minimum payments by extension, to rise in step with the prices of these more volatile goods.
It's true, in part. Prices for gasoline increased by 26% in August 2022 from the same month in 2021, and groceries increased by 14%, according to government data. Price increases for both are even higher than overall inflation, which has grown by more than 8% annually for much of the year. (Food and energy prices rise and fall more than other goods and services consumers use. It's one reason the Federal Reserve focuses on core inflation, which excludes volatile prices, when making policy decisions.)
And while consumers' wallets have been pinched by these rising prices, there's no broad indication that they aren't able to keep up on credit card and other monthly payments. The slow but steady increase in average credit scores, as well relatively low delinquency rates among individuals, doesn't indicate that financial stress is impacting mortgage, credit card and auto loan payments.
However, policy remedies designed to rein in inflation, like the numerous rate hikes the Federal Reserve has made in 2022, can increase the interest consumers accrue on their balances. This, in turn, impacts the monthly minimum payments consumers need to make on credit card payments.
One bright spot: Borrowers making payments on most types of loans can take some solace that payments won't increase. Auto loans, mortgages and personal loans are typically fixed-rate loans that aren't affected by Fed rate hikes during their repayment term.
Average Monthly Payments Are up in Only 3 States
The average monthly payment was $1,055 nationally in June 2022. Average payments are typically higher in Western U.S states, according to Experian data. Three contributing reasons: Home prices are rising faster than in other regions, residents drive longer distances and residents of that region have a higher average auto payment than the national average. There are also states in other regions with higher average payments, such as Alabama and Vermont.
Average Monthly Payment Per Consumer, 2022
Washingtonians currently have the highest average monthly payment of $1,301, followed by consumers in Maryland, Colorado and Delaware. Among the states with the lowest average monthly payments are Wisconsin at $810, followed by Missouri and Kentucky.
Total Average Monthly Payments, Change Since March 2020
Only three states—Florida, Oregon and Washington—have average monthly payments higher than they were in March 2020, when the World Health Organization determined we were in a global pandemic. Otherwise, payment decreases have been as sharp as $102 per month in Hawaii and South Dakota.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.