2020 Credit Card Debt Statistics
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Americans have an absolute mountain of credit card debt in 2020.
But exactly how much credit card debt do they have?
That’s one of the big questions we’ll answer on this page, which is devoted to tracking Americans’ credit card use each month. We update it regularly, looking not just at how much debt people have, but also how often they carry a balance month to month, how often they pay their credit card bills late and more.
In this post
- How much credit card debt do Americans have?
- What percentage of cardholders carry a balance?
- What’s the average interest rate on people’s credit cards? What about those who carry a balance?
- How many Americans are currently delinquent with their credit card payments?
How much credit card debt do Americans have?
That’s Americans’ total revolving debt balance, according to the latest consumer debt data from the Federal Reserve.
The latest Fed data shows that consumer revolving debt fell at an annualized rate of 11.3% in August, leaving it at the lowest levels since June 2017.
It is the sixth straight monthly decline, dating back to March, when the COVID-19 pandemic took hold of the economy. It’s also the fourth month in the past six to have a double-digit decline. Balances fell by an annualized 28% in May, a record 64% in April and 28% in March. (Note: All of these percentages are annualized, meaning they represent what the decline would look like if it continued over a year rather than reflecting the drop in a single month.)
Even with all those drops, credit card debt in America is still high by historical standards. And it is light years beyond the $409 billion that we saw 25 years ago in July 1995.
Card debt showed hockey-stick growth until the financial collapse in 2008, when revolving debt fell from more than $1 trillion in the summer of 2008 to $832 billion in April 2011. But, as you can see in the chart below, the hockey stick returned.
It is anyone’s guess as to how long the recovery will take, how far credit balances will fall during the downturn and — perhaps most important — how quickly consumers will recover once the outbreak subsides. However, despite a big drop in August, I think it is likely that we won’t see historic decreases like the ones we saw earlier this year again unless a resurgence in COVID-19 forces another shutdown.
What percentage of cardholders carry a balance?
Job No. 1 for anyone with a credit card is to pay that balance off in full at the end of each month. But we all know that life happens, and that means that it’s not always possible to pay off your credit cards each month. That’s especially true in the wake of the Coronavirus outbreak.
Unfortunately, most people with an active credit card account don’t always pay their bills in full. According to data from the American Bankers Association, 42% of credit card accounts carried a balance at some point in Q2 of 2020, 32% of accounts were active but didn’t carry a balance and 26% of accounts were dormant for the quarter.
The number of accounts that carried a balance fell 2 percentage points in the second quarter, while the percentage of those who did not revolve a balance increased by about half of a percentage point.
What’s the average interest rate on people’s credit cards? What about those who carry a balance?
The latest Federal Reserve data showed that the average APR for all current credit card accounts rose slightly, up to 14.58% in the third quarter of 2020. Meanwhile, APRs for cards that are accruing interest rose more sharply — up to 16.43% from 15.78% a quarter ago. It is the first increase for that rate after four straight quarters of decline.
If you’re planning to get a new credit card, your interest rate will likely be higher than any of those listed above. The latest LendingTree data on credit card APRs shows that the average APR with a new credit card offer is 19.28%, with the average card offering an APR range of 15.68% to 22.87%, with your rate varying based on your creditworthiness.
And also as the chart below shows, the rate you are offered can also vary widely based on the type of card for which you apply.
Of course, your best move is to make those interest rates a moot point by paying your card debt in full, but that’s often easier said than done.
How many Americans are currently delinquent with their credit card payments?
According to the most recent delinquency data from the Fed, the 30-day delinquency rate (or the number of folks who are currently at least 30 days late with their credit card payment) fell to 2.42% in the second quarter of 2020. That’s a significant drop from Q1 of 2020 and marks the lowest level seen since Q1 of 2017. The current rate is also quite low by historical standards — the average since the Fed began collecting that data in 1991 is about 4% — and it’s far below the record 6.77% rate we saw in April 2009, in the depths of the Great Recession.