2024 American Household Credit Card Debt Study

2024 was a year that looked good and felt bad, financially, for many. According to NerdWallet’s annual household debt analysis, revolving credit card debt is up year-over-year, but only slightly, and the gap between cost of living and income growth is narrowing, pre-pandemic to now. Theoretically, this should lead to more positive feelings, as it’s an improvement on the past few years. But emerging from an election season where the economy was top of mind and ballot, it’s clear that the broader economy still doesn’t feel right at a household level.

NerdWallet’s annual analysis of household debt finds that revolving credit card debt is up just 1.5% compared to 2023. On average, a household with revolving credit card debt owes $10,563. [1] Mortgage, auto loan, student loan and overall total household debt have also all increased slightly from last year.

Here’s a breakdown of what U.S. households owed in total and the average amount per household with each type of debt, as of September 2024 [2]:

Our annual report analyzes government data from sources such as the U.S. Bureau of Labor Statistics and the Federal Reserve Banks of New York and St. Louis to show how household debt has changed since 2023. Additionally, NerdWallet commissioned a survey to capture consumer sentiment on credit card debt.

The survey of more than 2,000 U.S. adults, conducted online by The Harris Poll in November 2024, asked Americans if they carry revolving credit card debt and, if so, what types of expenses contributed to their balances. We also asked about their debt payoff plans.

Key findings

• Major household expenses have increased more than income over the past five years. Since 2019, median household income has gone up 21%. [3] During that time, cost increases of food (27%), housing (26%) and transportation (28%) have outpaced that income growth. [4]

• Revolving credit card debt is made up of a mix of essentials and non-necessities. According to our survey, 48% of Americans who currently have revolving credit card debt say paying for necessities contributed to their balances. But not all debt is made up of essential expenses: 41% say shopping — for non-necessities like luxury goods and electronics — led to some of their debt.

• Interest costs could nearly triple the average debt for those making minimum payments. For a household with the average revolving credit card debt of $10,563, making just the minimum payments could mean a total cost of $28,683, after factoring in interest expenses.

• Some indebted Americans are waiting for higher income to pay off their balances. According to the survey, 30% of Americans with revolving credit card debt say they plan to pay it off once they make more money. Interestingly, those with a household income of $100,000+ aren’t any less likely to say this than those who have a lower household income (30%, compared to 29% among those with a household income of less than $100,000).

“It’s hard to feel good about any positive economic news when you’re struggling to afford your expenses,” says Sara Rathner, a NerdWallet credit cards expert. “Debt doesn’t just happen because of frivolous spending. For many, credit cards help fill the gaps when your income isn’t enough to afford necessities. Unfortunately, it can be a very expensive way to get by.”

Cost of essentials has outpaced income growth since 2019

Each year, we analyze how the cost of living and median household income have grown over the past decade. By that measure, consumers should be doing great financially — income has gone up a whopping 55% since 2014, while the cost of living has increased by only around 33%. [5] But the story changes a bit when you look at just the last five years, from pre-pandemic to now.

Since 2019, overall costs are up around 23%, while income has grown 21%. [3] While cost-of-living growth is higher, it’s not significantly outweighing income growth during this time frame. That said, some of the biggest expenses in Americans’ budgets have outpaced wage growth, including food (up 27%), housing (up 26%) and transportation (up 28%). [4] This might explain the financial pinch many Americans are feeling, even as overall inflation has slowed significantly over the past two years.

According to our survey, nearly 2 in 5 Americans (37%) currently have revolving credit card debt, and of them, 48% say paying for necessities contributed to those balances. But not all credit card debt is racked up for essentials.

Shopping is a major contributor to credit card debt

Many Americans use credit cards to make ends meet, but there are plenty of non-necessities that are contributing to credit card debt. The survey found that 41% of Americans who currently have revolving credit card debt say shopping contributed to their balances, while 30% say the same of travel expenses.

Some of those in credit card debt may not realize how much it’s costing them. According to the survey, 14% of Americans who currently have revolving credit card debt say it’s worth it for the rewards they earn on their spending. This is likely not the case, as interest costs quickly outweigh rewards.

Minimum payments could mean decades of debt due to interest

More than 1 in 5 Americans who currently have revolving credit card debt (22%) say they generally only make the minimum payment on their credit cards each month, according to the survey. But for those with the average amount of such debt, this strategy could keep them in debt for decades and cost thousands of dollars in interest.

According to the Federal Reserve Bank of St. Louis, the average interest rate on credit cards assessing interest is 23.37%, as of August 2024. If a consumer had the average household credit card debt of $10,563 and they made minimum payments of 3% of the balance or $35, whichever is higher on a given month, it would take nearly 22 years to pay it off and cost more than $18,000 in interest. That’s assuming they didn’t add to the balance at all during that time frame.

More than a third of Americans who currently have revolving credit card debt (35%) say they’ll probably always have some revolving balances, according to the survey. But in light of the high costs of carrying credit card debt from month to month, it’s a good idea to make a plan to pay it off, once and for all.

Some plan to pay off their debt when more money materializes

According to the survey, nearly 3 in 5 Americans with revolving credit card debt (57%) say they’re steadily paying their debt down now, but many indebted Americans are waiting for their circumstances to change. The survey found that 17% plan to pay off their credit card debt once they’re out of an expensive season of life, 16% plan to pay it off with a tax refund and 15% plan to pay it off with a future windfall.

Three in 10 Americans with revolving credit card debt (30%) say they plan to pay it off once they make more money. Notably, there isn’t a statistically significant difference between household income levels for this sentiment (30% among those with household income of $100,000+ and 29% among those with household income of less than $100,000), suggesting that more money isn’t always the cure-all for pesky balances. Some indebted Americans may truly need to earn more in order to make progress on their debt, but others may just need to evaluate their spending habits.

What to do if you’re in credit card debt

Make a plan to pay it off

A majority of Americans who have non-mortgage debt (70%) have a debt payoff plan in place, according to the survey. If you aren’t yet sure how to tackle your debt load, here are a few methods to consider.

The snowball method: More than a quarter of Americans with non-mortgage debt (26%) are paying it off using the snowball method, where you pay off your debts in order of their balances from lowest to highest. So let’s say you have three debts — Debt A is $100, Debt B is $400 and Debt C is $700. You’d make just the minimum payments on Debts B and C, while focusing on paying down Debt A. Once that balance is eliminated, you’d start putting that money toward Debt B, and so on.

The avalanche method: Over 1 in 5 Americans with non-mortgage debt (21%) use the avalanche method, where you pay off your debts in order of their interest rates, from highest to lowest. So if Debt A has an interest rate of 5%, Debt B charges 0% and Debt C charges 24%, you’d make only minimum payments on Debts A and B, focusing on Debt C before moving on to Debt A.

Emotional impact: Nearly a quarter of Americans with non-mortgage debt (24%) say they’re paying off their debt in order of emotional impact, rather than using quantitative factors. So let’s say Debt B is 0% interest, but it’s a loan you took from a family member that’s causing some tension. You might opt to pay that off first, despite it not having the lowest balance or highest interest rate because it doesn’t feel good to keep carrying it.

What’s the best debt payoff plan? Whichever one you stick to. The snowball method has the psychological benefit of quick wins, the avalanche method saves you the most money and the emotional impact way may be the best way to alleviate stress. But at the end of the day, they’re all fine methods as long as you’re making progress on your balances.

Start right away

It’s tempting to put off debt repayment until a nebulous future where you have loads of extra money to spare. But there’s a possibility that you won’t have an abundance of money in the future. And even if you do, money has a way of getting spent when not intentionally allocated to financial goals. So whether you can find an extra $10, $100 or $1,000 that you can reasonably put toward debt now, start doing that to save yourself time and interest.

Go through your expenses and see what can be reduced or eliminated. We don’t recommend taking all the fun out of your budget, but since 27% of Americans with revolving credit card debt cite it as their No. 1 stressor according to the survey, you may want to prioritize low-cost activities to free up cash for debt payments.

“A few baby steps today will make a big difference later on,” Rathner says. “One way to get started is to pull up your most recent credit card statement and simply see where your money goes in the course of a month. You may be surprised by what you can cut out going forward.”

Consider alternatives if you can’t make progress

Making progress, or even making minimum payments, can be a struggle for some. According to the survey, 14% of Americans with revolving credit card debt say they can’t afford the minimum payments. If you feel like you can’t get ahead, you may have some options.

If a lower interest rate would give you a leg up financially, talk to your credit card issuer about lowering your current rate, or look into a balance transfer credit card if you have good credit.

If your balance(s) is simply too high for you to reasonably make progress paying it off, debt relief may be a good option for you. This could mean using a nonprofit credit counseling agency to create a debt management plan and consolidate your debts at a reduced interest rate, or even filing for bankruptcy. The latter will hurt your credit, it’s true. But it will eventually fall off your credit report — in seven or 10 years, depending on the bankruptcy type — and could give you the breathing room you need to make a fresh start.

“If you’re struggling with your debt on your own, an accountability partner can be a huge help. It can be a money-savvy friend, or a financial professional like a credit counselor,” Rathner says. “Paying down debt can feel like a marathon, and marathon runners need cheering spectators to keep going.”

Methodology

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Nov. 15-19, 2024, among 2,099 U.S. adults ages 18 and older, among whom 806 currently have revolving credit card debt. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].

NerdWallet’s analysis includes data from the following sources:

• Large Bank Consumer Credit Card Balances: Revolving Balances Only, April 2024, from the Federal Reserve Bank of St. Louis.

• Household Debt and Credit, September 2024, from the Federal Reserve Bank of New York’s Center for Microeconomic Data.

• Families and Households, November 2024, from the U.S. Census Bureau.

• 2022 Survey of Consumer Finances from the Board of Governors of the Federal Reserve System.

• Consumer Price Index, September 2024, from the U.S. Bureau of Labor Statistics.

• Historical Income Tables: Households, 2023, from the U.S. Census Bureau.

• Employment Cost Index Historical Dataset, September 2024, from the U.S. Bureau of Labor Statistics’ National Compensation Survey.

• Commercial Bank Interest Rate on Credit Card Plans, Accounts Assessed Interest, August 2024, from the Federal Reserve Bank of St. Louis.

Disclaimer