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Survey: Half of American cardholders now carry credit card debt, many with no plan to pay it off

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Published on August 05, 2024 | 7 min read

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Unrealistic image of cash blending and changing into a credit card
C.J. Burton/ Getty Images; Illustration by Austin Courregé/Bankrate

Credit cards can be powerful tools to purchase things you need and build a strong credit history, but they can also be risky. The cost of carrying credit card debt is high. Even so, more Americans — 50 percent, according to new Bankrate survey data — are carrying a balance today than they have been since March 2020.

With interest rates at an all-time high, you might wonder why cardholders are carrying that balance. But it’s not a simple answer. Economic factors like inflation and interest rates are making it hard for some Americans to make ends meet, survey data shows. In some cases, people might be doom spending or going into debt for fun.

It's important to prioritize credit card debt payoff because this is probably your highest-cost debt by a wide margin. — Ted Rossman, Bankrate Senior Credit Card Analyst

Bankrate’s key insights on credit card debt in 2024

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  • One-half of American credit cardholders carry a credit card balance from month to month. That’s 50 percent of cardholders, compared to 44 percent in January 2024 and 60 percent in March 2020.
  • The likelihood of having credit card debt increases with age until the boomer generation. Forty-two percent of Gen Z cardholders (ages 18-27), 53 percent of millennials (ages 28-43), 60 percent of Gen Xers (ages 44-59) and 48 percent of boomers (ages 60-78) carry a balance month to month.
  • Inflation and high interest rates are factors for many Americans. Thirty-four percent of debtors say inflation and 32 percent say high interest rates have made their credit card debt burdens worse since the beginning of 2022.

The number of Americans with credit card debt is at a four-year high

New Bankrate data tells a story about Americans’ debt: More people are carrying debt on their credit cards than they have since the early pandemic days. But that situation may or may not be by choice.

Fifty percent of credit cardholders carry debt from month to month. That’s up from 44 percent in January and is the highest figure Bankrate has observed since March 2020, when 60 percent of cardholders carried debt from month to month.

“Credit card balances fell sharply in 2020 as many Americans spent less during the pandemic and used stimulus funds to pay down debt,” explains Rossman.

He continues: “Since the beginning of 2021, however, credit card balances have been off to the races. According to Federal Reserve data, Americans owe 45 percent more now on their credit cards than they did in early 2021. And the credit card delinquency rate is at its highest point since 2011.”

No generation is free from the debt burden, but the likelihood of carrying a credit card balance does rise with age before dropping with the boomer generation. Forty-two percent of Gen Zers, 53 percent of millennials, 60 percent of Gen Xers and 48 percent of boomers with credit cards carry a balance from month to month.

Perhaps unsurprisingly, the likelihood of carrying a balance falls as income increases. Fifty-eight percent of cardholders with annual household incomes under $50,000 carry a balance month to month, compared to 54 percent with annual household incomes between $50,000 and $79,999, 46 percent with annual household incomes between $80,000 and $99,999 and 43 percent with annual household incomes of $100,000+.

Credit card debt is persistent, with 3 in 5 Americans carrying it for more than a year

The length of time cardholders are carrying debt may be a sign balances have become more difficult to pay off. Three in 5 of those with credit card debt (60 percent) have been in credit card debt for at least a year, up from 50 percent in 2021.

The likelihood of carrying debt for at least a year gets higher as you get older but stays relatively consistent with income. Here’s how many credit card debtors have carried debt for a year or more by generation:

  • 51 percent of Gen Zers
  • 58 percent of millennials
  • 61 percent of Gen Xers
  • 65 percent of boomers

And here’s how many debtors have carried debt for a year or more by income:

  • 62 percent with annual household incomes under $50,000
  • 56 percent with annual household incomes between $50,000 and $79,999
  • 61 percent with annual household incomes between $80,000 and $99,999
  • 62 percent with annual household incomes of $100,000+

Debtors blame inflation and interest rates for making their debt burden worse

The survey data shows that Americans feel the economy isn’t helping their debt situation.

About a third (34 percent) of credit card debtors say inflation has made their credit card debt burdens worse since the beginning of 2022, which is when the Fed started raising interest rates to counteract increasing inflation.

A similar share (32 percent) say high interest rates have made their credit card debt burdens worse since the beginning of 2022. These themes intertwine.

“High inflation and high interest rates have eroded Americans’ savings and more people are carrying more debt for longer periods of time.”

— Ted RossmanBankrate Industry Analyst

If you think of your income as divided into slices, the slice for everyday expenses might have grown in light of recent inflation. For example, groceries are 25.1 percent more expensive than they were before the pandemic, gas is 28.4 percent more expensive and rent is 23.9 percent more expensive. Because of that, the slice of your income dedicated to debt repayment may have shrunk.

At the same time, credit card interest rates are hovering at just more than 20 percent, so your credit card balance might be growing rapidly. It’s a double whammy, that could explain the uncertainty Americans feel about getting out of debt.

Roughly one in four Americans with credit card debt (24 percent) feel less confident in their ability to get out of credit card debt now than they did at the beginning of 2022. Furthermore, about one in six (17 percent) worry they might not be able to make their minimum credit card payments at some point in the next six months.

And just over two in five (42 percent) have a plan to pay off their credit card debt.

FAQs

Methodology: Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,437 U.S. adults, of whom 1,877 were credit card holders and 930 carry a balance on their credit card(s). Fieldwork was undertaken between June 24-26, 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

March 2020 Long Term Debt Survey: All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,526 adults. Fieldwork was undertaken between March 4-6, 2020. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).