Write About Everything

2022 American Household Credit Card Debt Study

Advertiser disclosure You’re our first priority. Each time. We believe that every person should be able to make sound financial decisions without hesitation. While our website doesn’t feature every company or financial product that is available on the market however, we’re confident of the advice we provide, the information we provide and the tools we create are independent, objective easy to use and completely free. So how do we earn money? Our partners pay us. This could influence which products we write about (and where those products appear on the site), but it doesn’t affect our suggestions or recommendations, which are grounded in hundreds of hours of study. Our partners are not able to pay us to guarantee favorable ratings of their goods or services. .

2022 American Household Credit Card Debt Study

NerdWallet’s annual study finds that credit card debt is growing as the cost of living increases. Additionally, many Americans are concerned about financial issues in the next year.

by Erin El Issa Senior Writer | Personal finance, data analysis credit cards Erin El Issa writes data-driven studies about personal financial matters, credit cards, investments, travel, and student loans. She is a fan of numbers and hopes to make data sets understandable to help people improve the quality of their lives financially. Prior to becoming a Nerd at the beginning of 2014, Erin was a tax accountant and freelance personal financial writer. Erin’s writing has been featured in The New York Times, CNBC, on the “Today” show, Forbes and elsewhere. In her spare moment, Erin reads voraciously and tries in vain to keep up with her two kids. Her home is in Ypsilanti, Michigan.

Jan 10, 2023

Edited by Paul Soucy Lead Assigning Editor Credit scoring, credit cards, personal finance Paul Soucy leads the credit cards content team at NerdWallet. He was an editor with the Des Moines Register, USA Today and Meredith/Better Homes and Gardens for more than 20 years. He later establishing an established freelance writing and editing business. He edited the USA Today Weekly International Edition and was awarded the most prestigious award by ACES: The Society for Editing. He holds a bachelor’s degree in journalism and a Master of Business Administration.

Many or all of the products featured here come from our partners, who pay us. This impacts the types of products we feature and the location and manner in which the product is featured on a page. But, it doesn’t affect our assessments. Our opinions are our own. Here is a list of and .

The past year has been a very expensive one: The cost of living has risen faster than incomes, forcing many Americans to take on more debt to get by. And interest rates that have increased due to the rising cost of living are making debt costly.

NerdWallet’s annual review of household debt finds that credit card balances from month to month increased over the past 12 months, which totaled an estimated $460 billion by September 2022 . Auto loans and overall debt load also increased over the course of the year, and student loan debt dropped somewhat.

Here’s a breakdown of the amount U.S. households owed in total , and the average amount per household for all types of debt at the time of September 20, 2022:

Type of debt

The total amount owed by an average U.S. household with this amount of debt

Total owed in the U.S.

Change in percentage for total debt between 2021 and 2022.

Any type of debt*

$165,388

$16.51 trillion

+7.65%

Cards for credit (total)**

$17,066

$1.05 trillion

+15.17%

Credit cards (revolving)

$7,486

$459.6 billion

+28.73%***

Mortgages

$222,592

$11.67 trillion

+8.54%

Auto loans

$28,975

$1.52 trillion

+5.31%

Student loans

$58,238

$1.57 trillion

-0.64%

* This debt may include mortgages as well as lines of credit for home equity and auto loans, credit cards, students loans and other household debt, according to the Federal Reserve Bank of New York. Total U.S. credit card outstanding debt is comprised of transacting and revolving balances. ***Revolving debt was calculated using the average of the previous five years of percentage of debt on credit cards deemed as revolving (carried from month to month) instead of transacting (paid monthly in full). We’ve received these numbers from Experian. The credit bureau declined to provide the revolving vs. transaction data for 2022.

A note about the data for this year

The increase of nearly 30% in revolving credit card debt which is balances of credit cards that are that are carried from month to month could be attributed to two factors: a significant increase in the total debt of credit cards (revolving or nonrevolving) and a larger percentage of the revolving debt. Credit card debt total rose by 15 percent. With the cost of living exceeding the growth in income It is logical that the majority of the increase was in through revolving debt. This is merely an estimate. We calculated it with the average percentage of revolving loans from the last five years. This figure is higher over the historically lower revolving debt percentage of 2021 but is similar to percentages from prior years before the COVID-19 pandemic.

Our annual study analyses government data including such sources like the U.S. Bureau of Labor Statistics and the Federal Reserve Bank of New York — to see how the debt of households changes over the last year. NerdWallet has also recently conducted to conduct an online study of over 2,000 U.S. adults, conducted by Harris Poll. Harris Poll, to learn more about how Americans think about their debt and what they expect to happen in the future when rate hikes will impact their finances. We also inquired about Americans using “buy now, buy later” services, how the income they earn has (or hasn’t) kept pace with inflation, as well as their financial concerns for the coming year.

Key results

Prices are rising more quickly than incomes. In the past year, the median household income has risen just 4 percent, while the total cost of living increased by 8percent . The survey found that nearly fifty percent of all employed Americans (45 percent) claim that their earnings haven’t been growing enough in the last twelve months to keep pace with the rate of inflation.

Buy now, pay later services may mean deeper debt for millions. Close to 1 in 5 Americans (18 percent) said they’ve utilized a BNPL service within the last 12 months.

Consumers are anxious about financial stability over the coming year. Seven out of 10 Americans (69 percent) are worried about their finances over the next 12 months. The top. 1 worry is having to go into debt/more borrowing to meet the needs (31 percent) and then paying higher the interest they pay on their debt (27 percent).

The amount of interest on credit cards paid by households is rising in recently announced Federal Reserve rate hikes and rising amounts of revolving credit card debt. U.S. households that carry credit card debt are expected to pay an average of $1,380 in the interest rate this year . And that’s assuming interest rates don’t go higher.

“Credit card debt is often considered to be the result of impulsive spending, but for many Americans, that’s just not the case,” says Sara Rathner who is a credit card NerdWallet expert. “Consumers feel the pressure of rising prices and high the rising interest rates, and wages aren’t enough to keep up. This is forcing many to take difficult decisions, such as going into debt to pay for necessities.”

The cost of living is outpacing the growth in income significantly over the past year

Every year, we examine the increase in the cost of living as compared to the household income in the prior decade to see if income is keeping pace with expenses. When using that 10-year time period, we discovered that income growth is on the rise the pace: Median household income has grown by 44% from 2012, while the overall cost of living has increased by 28% in the same period . But the situation is completely different when you look at rapid growth in the short term, due to the COVID-19 pandemic and unusually high inflation.

Looking at growth over the past three yearsfrom pre-pandemic up to today- median income has grown by 7 percent, however overall expenses have been up by almost 16 . This includes a 27% rise in the cost of transportation, a 20% increase for food and beverages costs and a 14% increase in housing expenses. This could be a reason the reason, according to our survey, 45% of Americans say their overall financial situation is getting worse when compared to prior to the COVID-19 pandemic.

In the survey, nearly half of employed Americans (45%) say their pay hasn’t increased enough over the past 12 months to keep pace with inflation. The consumer price index as well as data on income growth back this up. In the last year we’ve seen prices rise up to 8.2% annual inflation, in September 2022. This includes a 13 percent increase in transportation costs, 11% in the cost of food and beverages and 8% in the cost of housing. Meanwhile, households’ median income has risen only 4% during this time .

Consumers are doing all they can to combat higher prices. According to the study almost 4 out of 5 Americans (79%) say they have implemented measures to combat rising prices over the last six months. In the past six months, 42% of Americans have said they’ve driven less, while 39% say they’ve bought more brand-name store brands as well as unprocessed items. A majority of Americans (19%) say they’ve taken on more debt due to the rise in inflation over the last six months.

” Reviewing your spending habits for places to cut back and then putting the extra funds to savings or debt repayment can be a big help. ” Sara Rathner , NerdWallet credit card expert

Debt is making Americans feel overwhelmed, anxious and stressed

Over the past year, almost 3 in 10 Americans (28%) declare that their overall debt has risen, with 14 percent of Americans say they’ve taken on medical debt in this time. And this debt is likely taking a toll.

According to the study, 41% of Americans who are currently in debt are worried about it, and 35% are overwhelmed. The feeling of being overwhelmed is more prevalent among Americans with annual household incomes less than $75,000 and who have debt: 44% of the population feels this way, in contrast to 27% of the indebted Americans who have an annual household income of $75,000 or more.

BNPL could be hiding other debt

Our annual analysis of household debt examines the traditional types of debt like credit cards, mortgages and student loans. Robust data about such debts is compiled and reported by government agencies such as that of the Federal Reserve Bank of New York. But the debt problem may be exacerbated by the emergence of short-term loans made by , such as Affirm and Klarna. BNPL services allow you to purchase something right now and make payments in installments -usually 25% at the time of purchase and 25% every two weeks until the loan is paid off. The longer-term BNPL options typically cost interest, just like an installment loan.

According to our study roughly one-in-five Americans (18%) have utilized a BNPL service in the past twelve months. This situation is more prevalent among younger Americans 25 percent of Gen Zers (ages 18-25) and 30% of millennials (ages between 26 and 41) have utilized these services over the last year, while 16% of Gen Xers (ages 42-57) and 7% from baby boomers (ages between 58-76).

Some Americans depend heavily on BNPL services to pay for the necessities of life — things that are used up before they’re even paid for. According to a September 2022 report from the CFPB or CFPB usage of the CFPB for everyday or necessary purchases such as gasoline, food and utilities — increased by 434 percent in the period between 2021 and 2020 and increasing by 1,207% between the years 2019 and 2020.

BNPL services are often interest-free however, they can charge late fees for those who miss payments. The CFPB report found that 10.5% of BNPL clients were charged at minimum one late fee in 2021. While late fees are generally to be modest at around $7 on the typical loan total of $135 -the report points out the potential negatives of the services, which could be financially harmful, such as overextending, and taking on more loans than you can reasonably handle.

For those who only use BNPL once in a while the possibility of overextension shouldn’t be an issue. However, for those who stack loans by taking multiple loans in a short amount of time and are regular BNPL users, these payment obligations can affect their ability to pay for other expenses promptly due to the quantity of BNPL obligations they are to pay. This can result in late fees, interest charges and even harm to credit scores.

Many Americans bringing financial anxiety to the beginning of the year

The past year has been expensive, and many people don’t believe things will improve in the coming year. A majority of Americans (69 percent) are worried about their finances in the coming year and the top worry being the need to enter debt, or deeper in debt, to cover necessities (31%).

More than one quarter of Americans (27 27.7%) are worried about the prospect of paying more interest rates on their debts over the coming 12 months. this comes after a series of rate increases by the Federal Reserve and the possibility of more rises in 2023.

The interest rates on credit cards are up and may go higher.

The Fed’s actions have increased the average credit card interest rate for accounts that pay interest to 18.43% as of August 2022, according the Federal Reserve Bank of St. Louis. The highest average rate since the St. Louis Fed began keeping track of this data in the year 1994. For American households with an average of credit card debt revolving it would cost $1,380 in annual interest charges. In the past year, the average annual interest costs were $1,029 due to the lower amount of revolving credit card debt and lower interest rates.

In 2022, Americans were treated to seven interest rate increase from the Fed and more may be expected in 2023. According to the study, more than 3 in five Americans (61%) believe that future rate increases will impact their financial situation, either positive or negative. Although 30 percent of Americans believe that it will make their current debt more expensive and 28% believe that it will make any new loans more costly, one out of five Americans (20 percent) believe that they will get more interest from their savings.

What do Americans can do

Prepare yourself for a possible recession. At present the recession hasn’t yet been declared officially, however some experts suggest that we’re already in one or will be soon. If you do know that one is coming, though it’s hard to predict what’s to come due to the fact that the effects of a recession don’t seem to be uniform nor universal, and the uncertainty could quickly escalate into calamity. The last several years have given ample evidence of the importance of being prepared for the unforeseeable however, there are methods to mitigate the effects on your financial health.

If you’re able to do so, add money to your savings routinely. It could be necessary to build an emergency fund of 3 to 6 months’ worth of expenses or even saving beyond that for the eventuality of a longer-term income loss. To free up more money to save, look at your budget and consider where you can cut. There is no need to cut back on your expenses forever, but in the short-term it will help you beef up your savings faster.

“If a one or two months worth of expenses are too much for you to be able to set aside now, shoot at a few hundred dollars in an emergency savings account” NerdWallet’s Rathner says. “It can be enormously helpful when faced with an unexpected cost.”

” It’s impossible to influence the economic climate but you can take the smallest steps to feel more financially secure right now. ” Sara Rathner , NerdWallet credit cards expert

It is better to pay now than later, if you can. A buy now, pay later program might be the right choice for you, but before you use one, think about other options. If you have the money for the payment of your balance placing the purchase on a credit card will earn rewards and also protect your purchase in case of a defective or return product. It is also a good idea to save money for unnecessary items over six weeks — the normal BNPL timeframe — before making the purchase. You may find you no want to purchase the item once a time has been passed.

If you choose to use BNPL services, you can set automated payments to avoid late fees . Also, limit the amount of purchases you make in an unspecified time to avoid getting overwhelmed.

Avoid large financial transactions, if possible. In light of consumer concerns over higher interest rates, credit being harder to get access to, and decreasing credits, it is possible that you may want to hold off on taking on new credit obligations as long as you can. It might not be practical for you, and that’s OK; sometimes it’s just not possible to wait for the right moment especially when we’re in financial stress. But if you can hold off on making major money moves then it’s probably a good idea to do so.

“This is a great moment to concentrate on the basics of financial management,” Rathner says. “Checking your expenditure for areas where you can cut back and applying any additional funds to savings or debt repayment could be extremely beneficial.”

Understand how higher interest rates affect you. A majority of Americans (21%) aren’t certain if future interest rate increases could affect their finances, according to the poll. However, if you’re a homeowner with variable-interest debt — such as credit cards or the home equity credit line- or have money in a savings account, higher rates are likely to affect you. The same goes for new loans with fixed rates such as an auto or mortgage loan.

Interest rate increases can make your debt more expensive however they can also make your savings grow faster. If you are in debt with a variable rate you should pay more or less frequent payments to reduce it faster. Avoid applying for large loans with fixed rates as well, if you can -high rates can make large purchases, such as a home or car, significantly more costly. If you have a savings account, check the interest rate. Rates were incredibly low up until recently, however now you can find with APRs, or annual percentage rates or APRs, of 3percent or more.

“The potential for economic uncertainty is always scary,” Rathner says. “You can’t manage the economy at large, but you can take small steps to feel more financially secure right now.”

Methodology

This poll was conducted online within the United States by The Harris Poll on behalf of NerdWallet between Oct. 25-27, 2022 among 2,041 U.S. adults 18 and older. The accuracy of sampling in Harris online polls is measured using a Bayesian reliable interval. For this study, the sample data is reliable to within +/- 2.8 percentage points using a 95% confidence level. To learn more about the methodology of this survey including weighting variables as well as subgroup sample sizes, please get in touch with Lauren Nash at .

The analysis of NerdWallet’s includes data from these sources:

, September 2022, from the Federal Reserve Bank of New York’s Center for Microeconomic Data.

December 2021, taken from The U.S. Census Bureau.

From the Board of Governors of the Federal Reserve System.

, September 2022, from the U.S. Bureau of Labor Statistics.

, December 2021, from The U.S. Census Bureau.

September 2022, of the U.S. Bureau of Labor Statistics’ National Compensation Survey.

, August 2022, from August 2022, from the Federal Reserve Bank of St. Louis.

Expand to footnotes for footnotes

[1] Credit card balances that are revolving analyzed differently from other types of household debt. In the case of credit card debt, Federal Reserve Bank of New York relies on data from Equifax, one of three largest credit reporting agencies within the U.S., as the source for its credit card debt data and also includes revolving balances (debt transferred from month to month) as well as transacting balances (debt that is due to be paid off in the next statement). The past few years, we’ve used information of the credit bureau Experian to calculate the proportion of balances that were revolved and transacted on bank credit cards. Experian hasn’t provided this data for 2022 therefore we utilized the median of percentages from 2017 to 2021. Data about revolving balances on retail credit cards was not available therefore we assumed that cardholders revolved their debt on both retail credit cards and bank credit cards at the same time. We then multiplied the total balances on credit cards across the U.S. — $1.05 trillion as of September 2022 by the percentage of revolving debt. (According reports from the New York Fed, the nation’s households had outstanding debt on credit cards of 925 billion by September 2022. This includes debt on bank credit cards but no retail credit cards. To make this figure more representative of all cards, we took $925 billion and compared the 25% reported “other” debt. The New York Fed says about 25% of this debt is outstanding retail credit card balances.) Finally, we divided this amount by the number of households that have credit card debt that is revolving. We calculated the number of household members by multiplying number of U.S. households, projected using data released at the end of 2021, and then dividing it by the percentage of households holding that debt (using 2022 estimates based on data of the Federal Reserve’s Survey of Consumer Finances).

2. To determine household debt for each category — with the exclusion of revolving credit card debt, we calculated the average amount of the various types of debt that are that was reported by the Federal Reserve Bank of New York and then divided it by the number of households with this kind of debt. We estimated the number of houses by multiplying the number U.S. households, projected from data that were released at the end of 2021, by the proportion of households that have this type of debt, based upon data taken from the 2018 Survey of Consumer Finances.

Consumer price indexes, or CPIs, measure changes in the price of the consumer products and services. The price indexes we surveyed include the cost of clothing as well as education and communications, food and beverage and food in the home environment, meals away from home, housing, medical, other goods and services, recreation and transportation. As per the U.S. Bureau of Labor Statistics the price index for all goods and services increased from 274.214 up to 296.761 between September 2021 to September 2022. Transportation CPI was up from 237.107 to 267.043 Food and beverages CPI rose between 280.413 and reached 310.635 and housing CPI was up between 283.532 and reached 306.323 between September 2021 and September 2022. To measure the change in the price index categories with income growth in 2012, we have projected a median household income of $70,653 in 2022 using the 2021 median reported income of $70,784 and then increasing or decreasing it by the quarterly percent changes reported within the Bureau of Labor Statistics’ Employment Cost Index data for civilian workers. Based on census data the median household earnings was $70,784 in 2021 and our projections show the median household income to be $73,653 for 2022.

4] To estimate interest rates on credit cards over the course of a year, we applied our estimation of credit card debt that is revolving as well as data about the average interest rate on credit card accounts assessed interest by the Federal Reserve Bank of St. Louis beginning in August 2022. In the event of a constant balance we multiplied the average revolving credit card debt among households with high credit card balances by their average annual percentage rate. This is merely an estimate. For the sake of simplicity, our calculations don’t take into account daily compounding or fluctuating balances.

[5] As per the U.S. Bureau of Labor Statistics, the price index for all goods increased between 231.015 and then 296.761 in the period between September 2012 and September 2022. Based on Census information the median household earnings was $51,017 in 2012; our projections suggest a median household income of $73,653 for 2022.

6. Based on the U.S. Bureau of Labor Statistics The price index for all items was up from 256.596 to 296.761 in the months of September and September 2022. Transportation CPI increased to 209.896 to 267.043 Food and beverage CPI increased by 258.59 to 310.635 as well as housing CPI increased between 267.555 to 306.323 between September 2019 between September 2019 and September 2022. Based on Census data the median household’s income was $68,703 in the year 2019 Our projections predict an average household income of $73,653 in 2022.

About the author: Erin El Issa is a credit cards expert and studies writer at NerdWallet. Her work has been featured in USA Today, U.S. News and MarketWatch.

Similar to…

Find the right credit card for your needs. Whether you want to pay less interest or earn rewards, the right card’s out there. Answer a few simple concerns and we’ll refine your search for the right card for.

Dive even deeper in Credit Cards

Find out more money-saving strategies delivered straight to your inbox

Join us and we’ll send you Nerdy posts on the financial topics that matter most to you and other ways to help you get more value from your money.

Take all the appropriate money moves

If you have any inquiries concerning where by and how to use check into cash online payday loan, nickloan.ru,, you can speak to us at our webpage.