Credit card debt is a common and costly problem for many Americans. According to the latest data from the Federal Reserve, the total U.S. credit card balance reached $930 billion in the third quarter of 2022, up from $887 billion in the previous quarter. The average credit card user now has more than $6,000 in credit card debt, close to the all-time high of 2019.
But not all Americans have the same amount of credit card debt. In fact, there are significant differences in credit card debt levels across various demographic groups, such as age, race, income, education, and location. In this blog post, we will explore how these factors affect credit card debt in America and what you can do to manage your own debt more effectively.
Credit Card Debt by Age
The amount of credit card debt you have tends to increase as you get older, until you reach retirement age. Then, it starts to decline as you pay off your debts and reduce your spending.
The table below shows the mean and median credit card debt by age group, as well as the percentage of people who carry any credit card debt at all.
| Age Group | Mean Credit Card Debt | Median Credit Card Debt | % With Any Credit Card Debt |
|---|---|---|---|
| Under 35 | $3,660 | $1,900 | 47.6% |
| 35-44 | $6,788 | $3,000 | 51.4% |
| 45-54 | $7,670 | $3,200 | 51.9% |
| 55-64 | $7,550 | $3,100 | 48.8% |
| 65-74 | $6,747 | $2,900 | 40.3% |
| 75+ | $8,080 | $2,700 | 28.0% |
As you can see, people in their 40s and 50s have the highest mean and median credit card debt, while people over 75 have the lowest percentage of carrying any credit card debt. However, this also means that the few seniors who do have credit card debt are likely to have a lot of it, which could put them in financial hardship.
Credit Card Debt by Location
The amount of credit card debt you have also depends on where you live. Generally, people who live in more expensive states have higher credit card debt, as they have to spend more on housing, transportation, and other essentials. They also tend to have higher incomes, which allows them to qualify for higher credit limits and spend more on discretionary items.
The table below shows the mean credit card debt by state, as well as the cost of living index and the median household income for each state.
| State | Mean Credit Card Debt | Cost of Living Index | Median Household Income |
|---|---|---|---|
| Alaska | $6,617 | 125.5 | $83,174 |
| Connecticut | $6,052 | 115.4 | $81,346 |
| Virginia | $5,998 | 102.4 | $80,121 |
| New Jersey | $5,976 | 114.0 | $85,751 |
| Maryland | $5,897 | 124.1 | $86,738 |
| Texas | $5,868 | 91.5 | $64,034 |
| Georgia | $5,867 | 89.2 | $61,980 |
| District of Columbia | $5,801 | 153.4 | $92,266 |
| Florida | $5,768 | 97.9 | $59,227 |
| Hawaii | $5,716 | 191.8 | $83,102 |
| Colorado | $5,696 | 105.6 | $77,127 |
| … | … | … | … |
| Mississippi | $4,590 | 84.8 | $45,792 |
| Maine | $4,561 | 95.6 | $58,924 |
| Kentucky | $4,536 | 86.1 | $52,295 |
| Wisconsin | $4,329 | 90.9 | $64,168 |
| Iowa | $4,285 | 90.1 | $61,691 |
As you can see, Alaska and Connecticut have the highest mean credit card debt, while Iowa and Wisconsin have the lowest. The cost of living index and the median household income are both higher than the national average in the top five states, while they are lower than the national average in the bottom five states.
Credit Card Debt by Income
The amount of credit card debt you have also correlates with your income level. Generally, people who earn more have higher credit card debt, as they have more spending power and qualify for higher credit limits. However, they also have more capacity to pay off their debt and avoid interest charges.
The table below shows the mean and median credit card debt by income group, as well as the percentage of households who carry any credit card debt at all.
| Income Group | Mean Credit Card Debt | Median Credit Card Debt | % With Any Credit Card Debt |
|---|---|---|---|
| Bottom 20% | $3,830 | $1,100 | 30.5% |
| 20th to 39th | $4,725 | $1,800 | 47.9% |
| 40th to 59th | $6,036 | $2,500 | 55.0% |
| 60th to 79th | $7,544 | $3,200 | 56.8% |
| 80th to 89th | $9,096 | $4,000 | 50.3% |
| Top 10% | $12,602 | $6,000 | 32.2% |
As you can see, the mean and median credit card debt increase with income, except for the top 10% who have lower median debt than the 80th to 89th percentile. The percentage of households with any credit card debt is highest in the middle-income groups, while it is lowest in the bottom and top groups.
Credit Card Debt by Race and Ethnicity
The amount of credit card debt you have also varies by your race and ethnicity. Generally, non-Hispanic white consumers have higher credit card debt than other groups, while non-Hispanic Black consumers have the lowest. However, Black and Hispanic consumers are more likely to carry credit card balances than white and Asian consumers.
The table below shows the mean and median credit card debt by race and ethnicity, as well as the percentage of consumers who carry any credit card debt at all.
| Race and Ethnicity | Mean Credit Card Debt | Median Credit Card Debt | % With Any Credit Card Debt |
|---|---|---|---|
| White, Non-Hispanic | $6,936 | $3,200 | 44.5% |
| Black, Non-Hispanic | $3,939 | $1,300 | 47.7% |
| Hispanic, Any Race | $5,507 | $1,900 | 49.9% |
| Other or Multiple Races | $5,637 | $2,000 | 43.7% |
As you can see, white consumers have the highest mean and median credit card debt, while Black consumers have the lowest. Hispanic consumers have higher mean debt than Black consumers, but lower median debt. Other or multiple race consumers have similar debt levels to Hispanic consumers.
There are several factors that explain the racial and ethnic disparities in credit card debt, such as:
- Credit Scoring Models. Credit scores are a key factor in determining credit card eligibility and credit limits. However, credit scoring models tend to favor white consumers over nonwhite consumers, as they reflect historical and structural inequalities in income, wealth, education, and access to credit. According to the Urban Institute, the median white consumer had a FICO score about 100 points higher than the median Black consumer, and about 60 points higher than the median Hispanic consumer, in 2021.
- Access to Credit. Access to credit is another factor that affects credit card debt. Many nonwhite consumers have no credit history or thin credit files, which limit their credit card options. According to the Consumer Financial Protection Bureau, 15% of Black and Hispanic consumers had no credit history at all, compared with 9% of white and Asian consumers, in 2015. A similar percentage were unscored, meaning they had some credit but not enough to generate a FICO score.
- Income and Wealth. Income and wealth are also important factors that influence credit card debt. Nonwhite consumers tend to have lower incomes and wealth than white consumers, which affect their spending and borrowing patterns. According to the Federal Reserve, the median income of white households was $76,057 in 2019, compared with $46,073 for Black households and $43,431 for Hispanic households. The median net
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