Are You Average When it Comes to Credit Card Debt?

by Miranda Marquit

Sometimes, it’s a bad idea to be average. When you look at average household debt in the United States, it becomes clear that average is nothing to aspire to. When you look at the average retirement savings in the United States, it’s obvious that you probably want to be well above average. The same thing is true when it comes to the average credit card debt in American households – you want to be above average!

Average Credit Card Debt in America

Average Credit Card Debt in America

Are you average?

Credit card debt is creeping higher in the United States again, after dropping during the recession that followed the 2008 financial crisis. Here are some of the facts about what it means if you are average when it comes to credit card debt:

  • Average household credit card debt: $7,150, according to the Federal Reserve.
  • TransUnion reports that, on average, Americans are carrying higher balances.
  • According to, the average credit card debt per household with credit card debt is $15,956.
  • The Survey of Consumer Payment Choice, published by the Federal Reserve Bank of Boston in January 2010, indicates that the average cardholder has 3.5 credit cards.
  • (as reported in U.S. News & World Report) says that 35% of credit card holders pay off their balances each month.

As you can see, being an average credit card holder is not a good thing.

One of the things I found most interesting was the difference between the average household credit card debt — which assumes that every household carries credit card debt — and the amount of credit card debt held by households with that type of debt. Things come into clear focus: If you have credit card debt, you are likely to have a significant amount of it. And credit card users are driving up the average debt overall.

Using a Credit Card vs. Having Credit Card Debt

It’s important to understand the difference between using a credit card and racking up credit card debt. From the information, it seems as though 65% of credit card users carry a balance month to month. That carried balance is credit card debt. The 35% of credit card users that pay off their cards each month may be using credit cards, but they aren’t accumulating credit card debt.

While it’s easy to point to the credit card debt data and say that credit cards are evil, the reality is that they are just financial tools. While credit card issuers may charge fees and high interest rates, the truth is that if you pay your bills on time, and pay off your balance each month, you won’t have to pay these fees. With the right planning and credit card strategy, you can make the most of credit card use, earning cash back, free travel, and discounted merchandise and gift cards.

The average American has credit cards. And the average credit card user builds up debt. It’s clear that you don’t want to be average in this regard. The average interest rate on credit cards, according to a November 29, 2012 survey from, is 14.02% for fixed rate cards and 14.58% for variable rate cards. The latest information from the Federal Reserve also indicates that credit card balances increased by $2 billion between the second and third quarters of 2012. That’s a lot of interest being paid to credit card issuers.  This is crazy when you can use a balance transfer credit card and get anywhere from 12-18 months with 0% interest.

Rather than being an average credit card user, you could save money by being a little bit unusual. Instead of carrying a balance, pay it off each month. That way, you avoid building up debt — and paying fees on it. You can put the interest you would have paid toward pursuits that actually benefit you, including investing so that you earn interest rather than pay it.

What do you think? Are you the typical credit card user?

Published or updated August 13, 2015.
Print or e-mail this article:

{ 2 comments… read them below or add one }

1 Emily @ evolvingPF

We’re in the 35% all the time. I appreciate your distinction between using credit cards and carrying a balance. We treat our credit cards like debit cards and only charge what we already have the money to pay for during that budget period.


2 Uclalien

I understand the point you’re trying to make. But I don’t know that being average is ever worth our aspirations.


Leave a Comment

Previous post:

Next post: