Average Credit Card Debt v. Total U.S. Credit Card Debt (2023 Infographic)

Causes of Increased Credit Card Debt in 2023

Several factors have contributed to the increased credit card debt in the United States in 2023, including:

1. Inflation: High inflation has fueled Americans' growing credit card debt, with millions living paycheck-to-paycheck. Day-to-day expenses and emergency expenses usually set us back—not lavish spending. For example, consumers accrued $180 billion in new credit card debt in 2022, the largest amount of debt added in a single year. Almost half of this, approximately $86 billion, was added in the fourth quarter alone.
2. High credit card interest rates: The Federal Reserve's interest rate increases have led to higher annual percentage rates (APRs) for people with credit card debt, which means they pay more in interest.
3. Day-to-day expenses: Day-to-day expenses, such as groceries, childcare, and utilities, are the reason many people are still carrying credit card debt.
4. Emergency expenses: Emergency expenses, such as surprise medical bills, car repairs, and home repairs, are another reason why people are carrying a balance on their credit cards. Here are some tips to starting an emergency fund.

What is the Largest Source of Household Debt in the U.S.?

The largest source of household debt in the United States is mortgage debt, which historically accounts for the majority of household debt. In 2022, American households owed $11.92 trillion on mortgages, making it the largest component of household debt. This is followed by student loan debt, which has been increasing faster than other types of debt over the past two decades and now stands at $1.60 trillion.

While credit card debt is a significant burden for many individuals, it represents a smaller portion of total household debt. 

Current Insights Into Americans' Debts

1. 74% of Gen Zers delayed major financial decisions due to student loans. (Bankrate)
2. 68% of millennials did the same because of student loans. (Bankrate)
3. 27% delay emergency savings due to student loans. (Bankrate)
4. 53% of Americans hold more in emergency savings than credit card debt. (Bankrate)
5. 50% prioritize boosting emergency savings over debt repayment. (Bankrate)
6. 38% of households earning $50k-$74.9k have more credit card debt than savings. (Bankrate)
7. 60% have had credit card debt for over a year. (CreditCards.com)
8. 19% have been in credit card debt for 5+ years. (CreditCards.com)
9. 31% of millennials carry credit card balances due to daily expenses. (CreditCards.com)
10. 20% of baby boomers do the same due to daily expenses. (CreditCards.com)