New Report: How Credit Card Debt Impacts the Average American

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By Thomas O'Shaughnessy Updated January 3, 2023


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Credit cards are an essential part of building credit and proving creditworthiness when buying a home, but 2019 might be a rough year for Americans with credit card debt.

In late December of 2018, the Federal Reserve raised its benchmark federal funds rate from 2.25% to 2.5%, resulting in an estimated $2.4 billion[1] in additional interest payments credit card users will pay this year. Meanwhile, credit card users closed out 2018 with over $420.22 billion[2] in revolving credit card balances, a 5% increase year over year.

While the average revolving credit debt per U.S. household — an estimated $6,929 according to NerdWallet[2] — represents a relatively small portion of total household debt, the high interest rates can make it particularly problematic and difficult to pay down.

With credit card APR jumping up to 17.64% – a new record high – it’s never been a better time to pay off your credit card balance.

In order to understand American credit card debt and the impact it has on major life purchases, Clever conducted a survey of 1,000 credit card users on March 3, 2019. Combined with CFPB credit card complaint data, we set out to gain insight into the average American’s purchasing habits, dependence on credit cards, and feelings about their dnofolebt in general.

Will Americans put off home buying to pay down high-interest debt?

Are millennials recklessly racking up their credit card balances with frivolous purchases?

Who’s really impacted by steadily rising consumer debt?

Read on for answers to these questions and more.

Key Findings

  • Credit card debt ranks as the most stressful type of debt for Americans
  • Almost half of credit card users (47%) carry a balance from month to month, and 72% of credit card debt holders carry more than $1,000 in monthly balance
  • Only 30% of Americans with credit card debt believe they’ll be able to pay it off within a year, leading low-income households to become trapped in debt cycles
  • Millennials might be the most financially responsible generation in terms of credit card usage, but they have a lot to learn. Only 50% of millennials know that credit card interest rates are higher than mortgage interest rates
  • 46% of Americans don’t trust credit card companies, and consumer complaints are on the rise

Fast Facts

  • 28% of credit card users have missed a monthly payment. The most common reason for missing the payment was "simply forgetting" (59%)
  • 38% of Americans with credit card debt say it has prevented them from making a major life purchase
  • If a $2,000 emergency happened tomorrow, 31% of Americans unable to pay out of pocket say they would use a credit card despite the high interest rates
  • Credit scores aren’t sexy: About 2 in 3 Americans would be offended if asked their credit score on the first date

Key Insights & Analysis

Credit Card Debt Ranks as the Most Stressful Debt for Americans

43% of Americans surveyed believe credit card debt is the most stressful type of debt, well above student loans (22%), mortgages (20%), and auto loans (9%).

Once credit card users start to rack up a balance, stress follows: 73% of credit card users with credit card debt are stressed by their balance. Interestingly, women are more likely to be stressed by credit card debt – men are almost twice as likely to say credit card debt didn’t bother them.

When credit card users don’t pay off debt each month, a balance can quickly accumulate with compound interest, leading to more debt and more stress. While it might be tempting to blame reckless consumer spending or enticing rewards programs, our data reveals a more nuanced picture.

The number one reason credit card users applied for a credit card was to have options in the event of an emergency. According to a Federal Reserve report[3], 44% of all Americans could not cover an unexpected emergency that led to an out-of-pocket expense. In other words, many Americans need credit cards to cover whatever life throws at them.

"Buying groceries" ranks as the number one expense that added to credit card debt; however, non-essential spending contributed to consumers' balances as well. Online shopping (48%), eating out (44%), and retail shopping (43%) all rank as top reasons for credit card debt.

Clearly a lack of financial responsibility can lead to overspending and unsafe amounts of consumer debt. However, many Americans have also needed credit cards for car repairs (39%), medical bills (30%), and home repairs (24%). The data suggests that while consumers apply for credit cards with the best of intentions (preparing for emergencies, building credit, etc.), the allure of quick and easy purchases typically leads to overspending.

Whatever the reasons for credit card debt, it quickly becomes an uphill battle.

Almost Half of Credit Card Users Carry a Balance Month to Month

47% of Americans surveyed carry some amount of credit card debt from month to month, and 72% carry at least $1,000 in debt. 23% of respondents indicated they have between $5,000 and $14,999 in debt, while a small minority (5%) indicated they have over $25,000 in debt.

Credit card interest compounds quickly. Only 30% of Americans believe they’ll be able to pay off their credit card debt in a year, and 56% of balance-carrying cardholders have had debt for at least a year[4].

Here’s the problem: 41% of credit card users don’t know the interest rate on their credit cards, so they have no idea how much they’re paying in compound interest each pay period. When consumers don't understand interest rates, it's tempting to make the minimum payments instead of paying off a balance quickly.

What can the average American balance-carrying cardholder expect to pay over time if they only make minimum payments? If we use the average estimated household revolving credit card debt from Nerdwallet of $6,929, assume the average 17.64% APR, and make 2% minimum payments each pay period, it would take over 34 years to pay off the average revolving debt[5]. Meanwhile, $16,776 in interest would be paid to the bank.

Clearly, making minimum payments each month isn’t the optimal solution, but unfortunately, for many Americans it’s the only solution. 34% of lower income households earning below $50,000 a year depend on credit cards for essential living expenses like rent, utilities, food, and groceries.

Lower income households were also 25% more likely to miss a credit card payment than middle income households. If lower income households can't pay off their credit card balance in full, the debt quickly snowballs to unmanageable levels, perpetuating a cycle of debt.

Millennial Credit Card Users: More Financially Responsible, Less Knowledgeable

When breaking down the survey results by age, millennials (age 18-34) were more likely to pay off their credit card balance each month than older generations: 62% of millennials pay off their credit card each month compared to 48% of older generations.

Millennials that did have credit card balances tended to have less debt than older generations, but this might be due to lower purchasing power and credit limits.

While millennials trended towards better credit card habits, they weren’t as knowledgeable about different types of loan interest rates. Only half of millennials realize credit cards have higher interest rates than mortgages.

In fact, 25% believe credit cards have lower interest rates than mortgages, and another 25% aren’t sure. Perhaps because they're older and wiser, 90% of Baby Boomers know that credit cards have higher interest rates than mortgages.

Interestingly, millennials are the only generation that believe student loans are more stressful than credit card debt. They are twice as likely to say student loans are the most stressful type of debt than respondents ages 35 and up.

We know from our 2019 Millennial Home Buyer Survey that the majority of millennials believe homeownership is part of the American Dream, but student loans and credit card debt might prevent millennials from realizing that dream. Sell concessions, home buyer rebates, and flat fee real estate agents can help millennial home buyers and sellers, but homeownership just isn't feasible for many millennials.

41% of millennials with credit card debt say their credit card debt has prevented them from making a major life purchase, more than any other generation. Millennials are facing new financial challenges previous generations haven’t experienced.

Half of Americans Don’t Trust Credit Card Companies, and Consumer Complaints are Rising

Our report finds that many Americans are fed up with credit card companies. 46% of credit card users don’t believe credit card companies are honest about their fees or interest rates.

Along with this distrust of credit card companies, we’re seeing a wave of consumer complaints. Based on our analysis of Consumer Financial Protection Bureau data[6], complaints against retail store credit cards totaled 4,064 in 2018, up from 2,652 in 2017. Complaints against credit card debt collectors are also on the rise. There were 8,459 complaints against credit card debt collectors in 2017 compared to 10,968 in 2018, roughly a 30% increase YoY[7].

Diving into general-purpose credit card complaints[8], big name credit card companies are racking up serious complaints. Capital One, Citibank, and JP Mortgage/Chase were the three companies with the most credit card-related complaints in 2018.

The most common complaints filed against credit card companies included unresolved disputes about purchases, problems with fees, and being charged for something the user didn't purchase. While many consumers purchase credit cards to ensure fraud protection, it appears credit card companies are not always quick to resolve disputes surrounding stolen cards and unexplained purchases. The complaints around fees are consistent with our findings: consumers find credit card fees confusing and, at times, dishonest.

These issues could have a real impact on the credit lending industry: our survey found that 51% of Americans prefer debit cards for day-to-day purchases compared to 27% preferring credit cards. Despite the apparent upside of credit cards, many consumers are avoiding the risks all together.


The proprietary data featured in this report was sampled from an online survey commissioned by Clever Real Estate and conducted by Pollfish. In total, Pollfish surveyed 1,000 Americans who indicated they own at least one credit card. The survey was distributed using organic sampling on March 3, 2019.

CFPB credit card complaint data was downloaded and analyzed for the full years of 2018 and 2017.

Full Survey Results & Data Analysis

View the full survey results

Download CFPB credit card complaint data


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[1] Federal Reserve FOMC statement

[2] NerdWallet 2018 American Household Credit Card Debt Survey

[3] Federal Reserve Report on Economic Well-Being of U.S. Households

[4] Debt Poll

[5] Minimum Payment Calculator

[6] CFPB Consumer Complaint Database - Retail Credit Cards

[7] CFPB Consumer Complaint Database - Credit Card Debt Collectors

[8] CFPB Consumer Complaint Database - General-Purpose Credit Cards

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