In this article:
- Credit Card Debt in the U.S. Continues to Grow
- Credit Card Delinquencies Still Relatively Low
- When Does Credit Card Debt Peak?
- Average Credit Card Balance Nears $6,200
- Credit Balances by FICO Scores
- Highest and Lowest Average Credit Card Debt by State
- Highest and Lowest Average Credit Card Debt by Metro Area
- Boost Your FICO Score
If you're carrying credit card debt, you've got plenty of company. Americans have $830 billion in credit card debt, according to Experian data from the second quarter (Q2) of 2019. Growth in Q2 credit card debt has risen steadily for eight straight years going back to 2012.
Credit card debt grew 6% year over year in Q2 2019 and is the second-fastest growing debt behind personal loans. The growth, however, is in line with previous year-over-year Q2 growth figures and slightly above the average quarter-over-quarter growth, which was 3% in Q2 vs. Q1 2019.
Credit Card Debt in the U.S. Continues to Grow
Credit card debt in the U.S. has been on a steady climb since 2015, growing 31% from Q2 2015 to Q2 2019, according to Experian. Overall credit card limits have reached $3.95 trillion, though $3.12 trillion of that is unused credit.
Where the real growth has taken place is in the number of accounts, as 20.8 million new credit card accounts were added in Q2, representing a 17% year-over-year increase from Q2 2018 and a 24% increase from Q2 2015.
"Americans continue to show their confidence using credit in 2019 as 61% of people now have a credit card. That consumer confidence is reflective of lenders' attitude toward providing more credit access to consumers," says Shannon Lois, head of analytics, consulting & operations at Experian. "As lenders' use of alternative data to help them better assess consumer risk increases, it enables them to present more consumers with credit offers while managing their risk appetite. We see this in credit card delinquency rates which have increased slightly, but are still far below the recession high of 2009, indicating that Americans are showing responsible credit card usage."
All of those accounts translate into 61% of Americans with a credit card as of Q2 2019. That's an increase of 8 percentage points in five years when compared with the same quarter in 2015. So does all this growth in debt mean it is time to panic? Not exactly, and here's why.
Credit Card Delinquencies Still Relatively Low
Consumers continue to show positive credit behavior, and that comes through in improved credit scores and lower delinquency rates. The average FICO® Score* was 703 in Q2 of 2019, a 13-point improvement compared with Q2 2009, and delinquency rates are nowhere near what they were at the height of the Great Recession.
This same responsible behavior is reflected in delinquency rates, which continue to perform well overall despite slightly increasing over the past few years. The same can be said about charge-offs, which is when a lender fails to get payment on a debt and gives up by closing the account or handing the debt over to a collection agency.
When Does Credit Card Debt Peak?
Typically, new credit card accounts grow in the latter part of the year and credit card debt peaks in the fourth quarter of each year during the holiday shopping season. This year looks no different, with the current healthy economy and steady low unemployment rate. Both factors can help fuel Americans' confidence in their spending ability, as evidenced by the eight straight quarters of debt growth dating back to 2012. In fact, the last time that credit card debt peaked outside of the fourth quarter was in Q1 of 2009 and in 2010 after the Great Recession.
All of these figures are an important reminder to be mindful of the amount of credit card debt you incur because credit scores are affected by elements such as payment history (including the number of late payments you have) and your credit utilization rate, or amount of available credit you're using.
|Average Credit Card Balances by Score Band|
As we enter credit card season, here is an overview of the credit card debt landscape, including which Americans carry the largest card balances, the states and markets that owe the most, and more.
Average Credit Card Balance Nears $6,200
The average credit card balance for Q2 2019 reached $6,194, slightly up year over year. Americans, on average, carry four credit cards, with an average account history of seven years and two months.
|Average Credit Card Balance and Limits|
|Year||Average Credit Card Balance||Average Credit Card Limits|
Source: Experian Q2 2019 data
Taking a look at credit card balances among consumers with a credit card, it's notable how credit card balances are spread out. Not surprising is that 45% of the balances are $5,000 or less and 6% of balances fall right where the average credit card balance is in the U.S., between $5,000 and $7,500. Balances of $20,000 or more grew 6% year over year.
|Distribution of Credit Card Balances|
|$2.5K or less||57.34%||52.59%||52.05%|
|$50K or more||1.19%||1.01%||1.09%|
Source: Experian, Q2 balance data among consumer who have a credit card
|Credit Card Snapshot|
|Average Number of Credit Cards||4|
|Average Balance on Credit Cards||$6,194|
|Average Limit on Credit Cards||$22,751|
|Average Credit Card Account Age||87 months|
|Percentage of Americans With a Credit Card||61%|
Source: Experian Q2 2019 data
Credit Balances by FICO® Scores
When looking at the average credit card balances by FICO® Score ranges, you can see the same steady trend of growth over the past five years. The average balance for those with FICO® Scores considered very poor (300-579) has grown 27% in the past five years, the largest gain among the ranges. FICO® Scores considered exceptional (800-850), have grown 26% in the past 10 years, the largest gain in that time period among the different ranges.
"While credit card balance information is considered by FICO® Scores, the ratio of an individual's credit card balances to their credit limits is generally weighted more heavily," says Tom Quinn at FICO. "FICO® Scores tend to reward people using a lower percentage of their available credit and paying their bills on time."
Highest and Lowest Average Credit Card Debt by State
Alaska carried the highest average amount of credit card debt among states at $8,026 in Q2 2019. New Jersey came next, with $7,084, followed by Connecticut at $7,082. Iowa had the lowest average amount of credit card debt in Q2 2019 at $4,744, followed by Wisconsin at $4,908 and Mississippi at $5,134.
Every state saw an increase to its average credit card debt compared with the previous year. Maine, where average credit card debt increased by 5.8% over the past year, experienced the biggest growth. The states with the smallest average increases in credit card debt were Arkansas and Wyoming, where debt increased 0.5% year over year.
|Average Credit Card Debt by State|
|District of Columbia||$6,896||$7,077||2.6%|
Note: Data is from Q2 of each year
Highest and Lowest Average Credit Card Debt by Metro Area
Bridgeport-Stamford-Norwalk, Connecticut, had the highest average amount of credit card debt at $8,679 in Q2 2019. Dubuque, Iowa, had the lowest average amount of credit card debt at $4,080 in Q2 2019.
Looking at the average credit card debt changes this past year by metropolitan area, 331 metro areas saw their average credit card debt increase. Anderson, South Carolina, had the largest year-over-year increase of 6.6%. There were 32 metro areas that saw a decrease to their average credit card debt, with Panama City-Lynn Haven, Florida, seeing the biggest decrease in the past year at 3.7%.
|Average Credit Card Debt Ranked by Metro Area|
|Metro Area||Metro Area||2019||Change|
|Virginia Beach-Norfolk-Newport News, VA-NC||$7,471||$7,586||1.5%|
|Austin-Round Rock, TX||$7,193||$7,329||1.9%|
|Dallas-Fort Worth-Arlington, TX||$7,162||$7,291||1.8%|
|San Antonio, TX||$7,028||$7,210||2.6%|
|Houston-Sugar Land-Baytown, TX||$6,989||$7,205||3.1%|
|Atlanta-Sandy Springs-Marietta, GA||$6,958||$7,139||2.6%|
|New York-Northern New Jersey-Long Island, NY-NJ-PA||$6,880||$7,083||3.0%|
|Miami-Fort Lauderdale-Pompano Beach, FL||$6,737||$7,058||4.8%|
|Naples-Marco Island, FL||$6,747||$7,052||4.5%|
|Killeen-Temple-Fort Hood, TX||$6,922||$6,995||1.1%|
|Charleston-North Charleston, SC||$6,595||$6,913||4.8%|
|Ocean City, NJ||$6,645||$6,858||3.2%|
|Oxnard-Thousand Oaks-Ventura, CA||$6,588||$6,840||3.8%|
|San Diego-Carlsbad-San Marcos, CA||$6,571||$6,825||3.9%|
|Fort Walton Beach-Crestview-Destin, FL||$6,719||$6,719||0.0%|
|Tampa-St. Petersburg-Clearwater, FL||$6,489||$6,703||3.3%|
|New Orleans-Metairie-Kenner, LA||$6,564||$6,693||2.0%|
|Norwich-New London, CT||$6,514||$6,677||2.5%|
|San Francisco-Oakland-Fremont, CA||$6,393||$6,659||4.2%|
|Pensacola-Ferry Pass-Brent, FL||$6,451||$6,615||2.5%|
|Hartford-West Hartford-East Hartford, CT||$6,425||$6,587||2.5%|
|New Haven-Milford, CT||$6,393||$6,530||2.1%|
Note: Data is from Q2 of each year
Boost Your FICO® Score
If you have credit card debt and want help to improve your credit score, Experian offers Experian Boost™† . Through this opt-in platform, you have the chance to raise your credit scores instantly, and for free, by allowing Experian to include your utility and telecom bill payment histories in your credit report to factor toward your FICO® Score.
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