Credit Card Debt Statistics 2025: Data You Need to Know

Credit cards can be your best friend or worst enemy. 82% of U.S. adults own at least one credit card. They offer convenience, rewards, and purchasing flexibility when funds are low. However, easy access can lead to overspending, debt accumulation, and financial stress.

Our comprehensive report analyzes current credit card debt patterns in the U.S. We examine usage trends, average balances, and demographic differences. We also review internal data on debt lawsuits and settlement rates. Understanding these statistics helps you make informed decisions about your credit card debt.

Credit Card Debt

After the pandemic, credit card debt began increasing rapidly. It quickly reached its pre-pandemic figures. The upward trend became especially alarming in 2023 when it hit the 1 trillion mark.

In the second quarter of 2024, U.S. credit card debt reached $1.14 trillion. That’s $27 billion more than the previous quarter. It represents a 5.8% increase compared to the same period last year.

Credit card debt increased while aggregate credit limits only rose by $69 billion, or 1.4%. The increase stems mostly from more people using general-purpose credit cards. Their use plummeted during the early pandemic months.

General-purpose credit cards work at various stores and businesses. They include standard, premium, affinity, co-branded, corporate, home equity, and cash-secured programs.

By the end of 2022, general-purpose card debt climbed to $935 billion. That exceeded the $867 billion figure from before the pandemic started in 2019. Private-label card debt remained comparatively low. Despite a slight 2022 increase, it stayed below pre-pandemic levels at $87 billion.

Credit Card Debt by Age

Credit card debt reaches its peak as American adults reach middle age.

Americans aged 40-49 years have the most credit card debt. Those aged 18-29 years had the lowest share of debt. As Americans reach older age (70+), credit card debt significantly declines.

Credit Card Debt Repayment

People are paying off their credit card debts more than ever before. In 2022, a vast $3.2 trillion was paid. That matched the total amount spent using credit cards for the year.

Repayment levels have consistently risen since the first quarter of 2020. They’re now above pre-pandemic levels. While consumers spend more on debt payments, inflation reduces the impact of these payments.

Despite increased nominal payments, inflation limits real purchasing power growth. Inflation hinders consumers’ efforts to reduce their debt.

A recurring trend shows consumers with higher credit scores proactively pay down debts. General-purpose credit card repayment increased, reaching about 40% of what people owe. Private-label cards had more consistent repayment rates. People paid off about 12 to 15% of what they owe.

Credit Card Minimum Payment

Data shows that paying only the minimum amount each month hurts you financially. It takes longer to pay off the debt. It costs more in the long run.

The CARD Act now requires credit card companies to disclose minimum payment costs. Billing statements must show how much paying just the minimum will cost over time.

In 2022, the average minimum payment for general-purpose credit cards was $102. For private label cards, it was $69. These figures increased from 2021 when the average was $94 for general-purpose cards. Private label cards averaged $66.

Cardholders with credit scores below 580 (deep subprime scores) had higher minimum payments. Only those with the best scores paid less. Borrowers in the super-prime (above 720) and prime (660-719) categories enjoy lower minimum payments. Lenders view them as more trustworthy.

Better borrowers have a lower risk of default, reduced credit utilization, and eligibility for better terms. For private label cards in 2022, the minimum payment for those with deep subprime scores was $43 to $54 higher. Paying the minimum can be especially tough for those already struggling financially.

Credit Card Issuers

A card issuer, also called an issuing bank, is a company that provides bank cards or financial products.

In 2022, around 4,000 financial institutions offered credit cards in the U.S. Yet, the top 10 issuers represented 83% of credit card debt issued. That’s down from 87% in 2016.

The following 20 issuers managed to reach 12% of the market. Nearly 3,800 smaller banks and credit unions hold onto just 5-6%.

The average annual percentage rate (APR) for credit cards has increased. The APR margin now sits at a historical high of 14.3%. Credit card companies add this additional interest beyond the prime rate. Issuers have raised their APR margins.

In 2023, over half the direct mail offers from issuers featured higher APR margins. These rates increased compared to the previous year.

Credit Card Debt Collectors

When you fall behind on credit card payments, issuers often sell your debt. They sell to third-party debt collectors who then pursue payment. Debt collectors purchase portfolios at discounted rates. They profit from collecting more than they paid.

Debt collection companies vary widely in their approach and success rates. Some handle high volumes of smaller claims. Others focus on larger balances with higher settlement amounts.

Midland Credit Management has settled a total amount of $23.5 million. However, their average settlement is relatively low at $7,677. Other collectors pursue fewer cases but with higher average settlements.

If our partner Solo can help you respond to a debt collector’s lawsuit. Responding properly protects your rights. It also increases your chances of favorable settlement terms.

Credit Card Lawsuits and Settlement

Credit card companies and debt collectors file lawsuits to recover unpaid balances. Understanding lawsuit statistics helps you prepare if you face legal action.

California accounts for 13% of all U.S. credit card debt lawsuits. The state’s large population and high cost of living contribute to this figure.

The average lawsuit amount in the U.S. is approximately $13,440. However, debt collectors typically sue for around $3,027. The lower amount reflects the discounted price collectors pay for debt portfolios.

Settlement amounts are significantly lower than sued amounts. The average settlement amount is 65.8% lower than the amount sued for. That works out to around $1,991.

Many consumers successfully negotiate settlements for pennies on the dollar. Debt collectors often accept reduced payments. They recognize that some payment is better than none. If you’re facing a lawsuit, our partner Solo helps you understand your options. They can guide you through the response and settlement process.

Credit Card Interest Rates

Credit card interest rates have climbed dramatically in recent years. The average APR on credit cards nearly doubled. It jumped from 12.9% in 2013 to 22.8% in 2023.

High interest rates make carrying balances extremely expensive. They significantly increase the total amount you’ll pay over time. Even small balances can balloon when you only make minimum payments.

The Federal Reserve’s interest rate hikes directly impact credit card APRs. As the Fed raises rates, credit card issuers follow suit. The prime rate serves as the baseline. Issuers add their margin on top.

APR margins have reached historic highs. Issuers now add an average of 14.3 percentage points above the prime rate. More than half of direct mail credit card offers in 2023 featured higher margins. They increased compared to the previous year.

Your credit score heavily influences the interest rate you receive. Super-prime borrowers (scores above 720) qualify for the lowest rates. Deep subprime borrowers (scores below 580) face the highest APRs. The difference can exceed 10 percentage points.

Credit Card Usage

82% of American adults own at least one credit card. Credit cards have become essential for modern financial life. They’re used for everything from daily purchases to emergency expenses.

Credit card spending patterns changed dramatically during the pandemic. Usage initially dropped as people stayed home. Spending then rebounded strongly as the economy reopened.

General-purpose cards dominate the market. They account for the vast majority of credit card debt. Private-label cards (store-specific cards) represent a much smaller portion. They typically carry higher interest rates but offer store-specific rewards.

Americans rely heavily on credit cards for everyday expenses. Many use them to bridge gaps between paychecks. Others leverage rewards programs to maximize benefits. However, reliance on credit can become problematic when balances grow unmanageable.

The average cardholder grappled with $5,288 in credit card debt at the end of 2022. Cardholders with prime credit scores faced average balances of $9,135. Higher credit scores often correlate with higher credit limits and spending.

Credit Card Delinquencies

Credit card delinquencies occur when you miss payments. Accounts typically become delinquent after 30 days of non-payment. Delinquency rates serve as a key indicator of consumer financial health.

Delinquency rates have been rising in recent years. They remain below historical peaks but show concerning upward trends. Economic pressures like inflation and rising interest rates contribute to increased delinquencies.

Delinquent accounts progress through several stages. Initial delinquency (30-60 days) is often recoverable. Serious delinquency (90+ days) frequently leads to charge-off. Issuers write off the debt and often sell it to collectors.

Delinquencies vary significantly by credit score. Deep subprime borrowers experience delinquency rates far higher than prime borrowers. Lower credit scores reflect higher risk. They often correlate with financial instability.

Missing credit card payments triggers serious consequences. Your credit score drops significantly. Issuers may increase your interest rate. They can reduce your credit limit. Eventually, they may close your account and pursue collection.

Americans’ Financial Well-Being

Credit card debt statistics reflect broader financial well-being trends. Many Americans struggle with financial stress and uncertainty. Rising costs strain household budgets.

Inflation has eroded purchasing power significantly. While wages have increased, they haven’t kept pace with rising prices. Consumers increasingly rely on credit to maintain their standard of living.

Emergency savings remain inadequate for many households. Without sufficient reserves, unexpected expenses force reliance on credit cards. Medical bills, car repairs, and job loss create debt spirals.

Financial literacy gaps contribute to poor credit management. Many consumers don’t understand how interest compounds. They underestimate the true cost of carrying balances. Education about debt management is crucial.

The concentration of debt among middle-aged Americans reflects life stage expenses. Mortgages, children’s education, and peak consumption years strain finances. Retirement savings compete with debt repayment for available funds.

Geographic variations in debt lawsuits reflect regional economic conditions. California’s 13% share correlates with its large population and high living costs. States with weaker consumer protections see more aggressive collection tactics.

If you’re struggling with credit card debt or facing a lawsuit, help is available. Our partner Solo provides resources and support. They help you respond to lawsuits and negotiate settlements. Taking action protects your rights and financial future.