Credit Card Debt
Statistics 2024
Credit cards can be your best friend or worst enemy. With 82% of adults[1] in the U.S. owning at least one credit card, they have become a staple of modern life.
Credit cards offer convenience, rewards, and the flexibility to purchase when funds are low. However, the ease of access can also lead to overspending, debt accumulation, and financial stress.
The Solo Report on credit card debt provides a comprehensive overview of the current state of credit card debt in the U.S., analyzing data on usage patterns, average balances, and demographic differences. It also analyzes internal data on debt lawsuits and settlement rates.
Key Findings
- U.S. credit card debt reached $1.14 trillion in 2023.
- 13% of the U.S. credit card debt lawsuits are filed in California.
- Some creditors handle a high volume of smaller claims. For example, Midland Credit Management has settled a total amount of $23,5 million, but their average settlement is relatively low, at $7,677.
- The average lawsuit amount in the U.S. is approximately $13,440.
- The average amount debt collectors are suing for is around $3,027.
- The average settlement amount is 65.8% lower than the amount sued for, coming out to around $1,991.
- The average APR on credit cards nearly doubled, jumping from 12.9% in 2013 to 22.8% in 2023.
Topics Covered
Credit Card
Debt
Credit Card
Issuers
Credit Card Debt
Collectors
Credit Card Debt Settlement
Credit Card
Interest Rates
Credit
Card Usage
Credit Card Delinquencies
Americans’ Financial Well-Being
Topics Covered
Credit Card
Debt
Credit Card
Issuers
Credit Card Debt
Collectors
Credit Card Lawsuits and Settlement
Credit Card
Interest Rates
Credit
Card Usage
Credit Card Delinquencies
Americans’ Financial Well-Being
Credit Card Debt
After the pandemic, credit card debt began to increase and quickly reached its pre-pandemic figures. This upward trend became especially alarming in 2023 when it hit the 1 trillion mark.
General-purpose credit cards can be used at a variety of stores and businesses and include forms like standard, premium, affinity, co-branded, corporate, home equity, and cash-secured programs.
By the end of 2022, general-purpose card debt had gone back up to $935 billion, more than the $867 billion before the pandemic started in 2019.[3]
Private-label card debt remained comparatively low. While there was a slight increase in 2022, it was still lower than before the pandemic, at $87 billion[3] by the end of the year.
At the end of 2022, the average cardholder grappled with $5,288 in credit card debt.
Cardholders with prime credit scores faced average balances soaring to $9,135.
Credit card debt by age
Credit card debt reaches its peak as American adults reach middle age.
Americans aged 40-49 years have the most credit card debt, whereas those aged 18-29 years had the lowest share of debt.
Credit card debt repayment
Repayment levels have consistently risen since the first quarter of 2020 and are now above pre-pandemic levels.
While consumers are spending more on debt payments, inflation is reducing the impact of these payments in real terms.
Despite increased nominal payments, inflation is limiting real growth in purchasing power, hindering consumers’ efforts to reduce their debt.
A reoccurring trend in credit card payments is that consumers with higher credit scores are more proactive in paying down their debts.
General-purpose credit card repayment increased, reaching about 40% of what people owe in 2021 and 2022.
On the other hand, private-label cards had more consistent repayment rates, with people paying off about 12 to 15%[3] of what they owe.
Credit card minimum payment
Data shows that when people only pay the minimum amount on their credit cards each month, it can hurt them financially as it takes longer to pay off the debt and costs more in the long run.
To help with this, the CARD Act now requires credit card companies to show how much paying just the minimum will cost over time on billing statements.
In 2022, the average minimum payment for general-purpose credit cards was $102[3], while for private label cards, it was $69.
This is up from 2021 when the average was $94 for general-purpose and $66 for private label cards.
Cardholders with credit scores below 580, known as deep subprime scores, had higher minimum payments than others, except those with the best scores.
Typically borrowers in the super-prime (above 720) and prime (660 and 719) categories, enjoy lower minimum payments because they are viewed as more trustworthy by lenders.
This is due to their lower risk of default, reduced credit utilization, and eligibility for better terms and lower interest rates.
For private label cards in 2022, the minimum payment for those with deep subprime scores was $43 and $54 higher than those with better credit scores.
This shows that paying the minimum can be especially tough for those already struggling financially.
Credit Card Issuers
A card issuer, also called an issuer or issuing bank, is a company that issues (=produces or provides) something such as a bank card or financial products.
The following 20 issuers managed to reach 12% of the market, leaving nearly 3,800 smaller banks and credit unions to hold onto just 5-6%.
Data shows that in 2023, over half the direct mail offers from issuers featured higher APR margins than the previous year.
Credit Card Debt Collectors
A debt collector is a person or company that collects payments from people who have failed to pay the money they owe.
Debt collection affects millions of consumers, especially those struggling to repay credit card debts. When these debts go unpaid for an extended period, the original creditor eventually turns to a third-party collection agency for recovery.
At this point, the account becomes a collection tradeline, which indicates that the debt has been transferred to collections after the consumer failed to meet the agreed payment terms.
In 2022, nearly a quarter (23.5%) of consumer credit reports included at least one collection tradeline[3]. While medical debt represented over half of these collections, only 13% were tied to banking or financial debts, such as credit cards.
Consumers use Solo to draft and respond to lawsuits when they’ve been sued for debt.
We analyzed a sample of internal Solo data of over 30,000 recently filed debt collection lawsuit cases to visualize the number of suits filed by law firms on behalf of creditors and/or debt buyers.
These 30,000 debt lawsuit cases were filed throughout all 50 states and represent the present state of U.S. debt collection cases.
The following are some important observations of this data.
According to the data provided by our customers, we are able to extrapolate that LVNV Funding LLC files more than 10% of U.S. debt collection lawsuits, closely followed by Discover (7.17%), Midland Credit Management (7.17%), Velocity Investments (5.98%), and Portfolio Recovery Associates (5.91%).
Below, we break down the top ten creditors and debt buyers that file lawsuits to recover unpaid consumer debt in the U.S. further.
Credit Card Lawsuits and Settlement
Dealing with credit card debt causes immense stress on US Consumers. Many consumers consider a settlement as the way to get their finances back on track, and settlement is often the ideal outcome for both consumers and collectors.
To settle debt, consumers and collectors negotiate to reduce the total amount owed, often leading to either a one-time payment significantly lower than the original debt or a monthly payment plan for less than the full balance.
When a consumer negotiates a settlement of their debt, the amount they can save varies significantly based on the creditor or debt collector with whom they work.
A further analysis of Solo’s customer cases shows Wells Fargo Bank, N.A. has the highest average lawsuit amount at $14,450, indicating they tend to file lawsuits with larger claims.
On the other hand, Midland Credit Management, Inc. has the highest total lawsuit amount at $23.5 million but a lower average of $7,677, suggesting they file many cases with smaller claims.
After analyzing almost 300 settlement cases, we found that some debt collectors handle a high volume of smaller claims.
For example, LVNV Funding LLC has settled a total amount of $51,907, but due to the large number of lawsuits that they file, their average settlement is relatively low, at 1.8% of the total debt. This suggests they are likely to settle for much less than originally owned.
On the higher end, some creditors have fewer but larger settlements. Bank of America settles at 50%, followed by Absolute Resolutions Investments, LLC at 25%.
From the 300 settled debts we analyzed from our SoloSettle data, the average amount debt collectors are suing for is around $3,027, whereas the average settlement amount is 65.8% lower at around $1,991.
Settling the debt through SoloSettle, on average, takes less than a month from the time a lawsuit is filed to the first payment made.
Debt lawsuits by state
Out of nearly 30,000 lawsuits in our sample population, 13% of these lawsuits are issued in California, closely followed by Texas (12%), Florida (8%), and New York (6%).
Large populations, active economies, state-specific laws, and cultural factors surrounding litigation all contribute to the higher rate of lawsuits in these states.
States With the Most Lawsuits
While California and Texas have the highest number of lawsuits, they are not even in the top five when it comes to the total debt lawsuit amounts.
States With the Highest Lawsuit Amounts
Virginia has the highest lawsuit amount, reaching an average of $49,043. Nebraska, on the other hand, has the lowest, $5,342.
The average lawsuit amount in the U.S. is approximately $13,440.
Outliers like Florida and Hawaii were not included in these analyses to present a more accurate picture of average lawsuit amounts across states.
Credit Card Interest Rates
This rise made issuers an estimated $25 billion more in interest revenue in 2023.
While the difference in percentage might not seem much, a lower interest rate will save borrowers thousands of dollars. Here’s an example:
As seen above, interest rates will impact how much borrowers pay and how long it takes them to pay it back.
Credit Card Usage
In the second quarter of 2024, there were almost 600 million credit card accounts, an increase of 3.6% from the same period last year.
Trends in credit card usage change by income level, age, and ethnicity.
Credit card usage by income level
Having a credit card was less common at lower income levels. However, adults at these income levels who owned credit cards were more likely to carry balances from month to month.
The same trend follows the middle-income adults. They were the most likely to have a credit card and use it to finance their purchases by carrying balances from one month to the next.
Credit card usage by ethnicity
Around 90% of Asian adults[1] have equipped themselves with a credit card. A similar trend is seen with White adults, as 86% have a credit card.
However, these rates drop slightly for Hispanic and Black adults, 74% and 70%[1], respectively. In addition, Hispanic and Black cardholders were more likely to carry a balance.
Credit card usage by age
While older consumers still lead in credit card ownership, more young people are starting to get credit cards.
Since 2013, 88% of adults aged 65+ had at least one credit card.
With adults under 25, the trends are changing. In 2022, 64%[3] of adults in this age group had at least one credit card, a 14.3% increase from 2013.
This could be because younger people are beginning to see the benefits of having a credit card, like building credit scores and managing their money easily.
Credit card purchase volume
In 2022, credit card purchases went way up after the initial economic downturn from COVID-19.
The lion’s share of this increase came from general-purpose card accounts, which saw spending of $3 trillion in 2022—up 50% from two years before.
It’s like the saying goes: “The more you have, the more you want.” And based on the data, that’s true: there is a clear correlation between credit scores and spending patterns.
Cardholders with higher credit scores are likely to spend more on their cards.
For example, those with deep subprime credit scores spent an average of $1,100[3].
However, people with prime plus and super prime scores spent an average of $10,700 and $12,600, respectively.
Payments with credit card
Reports spanning from 2016 to 2023, show the use of credit cards has nearly doubled, as the average number of credit card payments is now 15, up from eight.
This suggests that day by day, credit is becoming a primary transaction method.
In 2023, credit and debit cards make up over 60%[4] of all payments types, with credit cards accounting for 32% and debit cards for 30%.
In 2024, there will be around 283 million online shoppers in the U.S.[6], and many of them prefer fast and easy payment methods.
This is why the Buy Now, Pay Later (BNPL) phenomenon is gaining popularity, especially among youngsters.
For over half (55%) of BNPL users, these payment plans are the only way they can afford certain purchases.
Credit Card Delinquencies
Recent data shows that about 9.1% of credit card balances[2] and 8.0% of auto loan balances have become delinquent.
Early mortgage delinquency rates have slightly increased by 0.1% but are still low compared to historical standards.
of credit card balances transitioned into delinquency in 2024.
of people had a third-party collection account on their credit report in 2024.
people had bankruptcy added to their credit reports in 2024.
From the start of 2020 to mid-2024, the figures show a clear upward trajectory in the percentage of balances that are 30 or more days delinquent.
In Q1 2020, the rate of new delinquencies stood at 6.84%[5].
This rate gradually declined to 4.1% by the end of 2021.
However, the trend shifted in 2022 as delinquency rates rose again.
This upward momentum continued into 2023 (8.52%) and 2024, with delinquency rates peaking at 9.05%.
At the end of Q2 2024, we are looking at a delinquency rate of 10.93%[5]. This increase suggests that people are struggling to handle higher prices and interest rates.
Credit card delinquencies by state
When analyzing credit card payment delinquency rates across the U.S., we found a concerning trend: the percentage of borrowers falling behind on their payments is gradually increasing.
As of July 2024, the national average of borrowers with at least 30 days past due (DPD) was 4.43% [5], an increase from 4.31% in July 2023.
Mississippi leads with a staggering 6.82% of borrowers reported as 30+ DPD, 4.82% as 60+ DPD, and 3.52% as 90+ DPD.
Montana has the lowest credit card delinquency, with only 2.83% of borrowers reported as 30+ DPD, while Minnesota has the lowest percentage of borrowers reported as 60+ DPD and 90+ DPD, 1.87% and 1.32%, respectively.
Credit Card Delinquencies by State
Americans’ Financial Well-Being
The financial well-being of American adults was characterized by both resilience and ongoing challenges by the end of 2023.
According to the Federal Reserve Board report, most adults (72%) were at least “doing okay” financially, with 39% stating they were “doing okay” and 33% “living comfortably.” However, 56% still struggle financially, with some barely getting by.
As we examine the demographics, we see some disparities in financial well-being across racial lines[1]. 82% of Asian adults report being at least okay financially, followed by 76% of White adults.
However, the numbers drop for Black and Hispanic adults, at 68% and 61%, respectively.
In terms of financial progress, data shows that 31% of adults[1] reported to be in a worse financial state than they were a year ago.
Nearly half of them (48%) reported their financial situation to be “about the same,” and only 20% claimed they were “better off” than the previous year.
Key Takeaways
U.S. credit card debt reached $1.14 trillion in 2023.
Growing credit card debt reflects increased consumer borrowing, which may lead to financial strain due to high interest rates and rising balances.
What to Do: Pay off high-interest balances first, avoid unnecessary spending, and consider consolidating or refinancing options to lower your APR.
Virginia has the highest lawsuit amount, reaching an average of $49,043.
Although rare, high lawsuit amounts show how severe debt can become, especially when it grows from interest and fees, leading to significant financial challenges.
What to Do: Address large debts early by negotiating payment plans or settlements with creditors, and seek professional financial advice or legal help to avoid overwhelming debt.
13% of the U.S. credit card debt lawsuits are filed in California.
Aggressive debt collection indicates rising financial pressure, with lawsuits potentially leading to wage garnishment or property liens.
What to Do: If sued, respond promptly to avoid default judgments, understand your legal rights under the Fair Debt Collection Practices Act (FDCPA), and consider negotiating a settlement.
Some creditors handle a high volume of smaller claims.
Debt collectors like Midland Credit often settle for lower amounts, allowing borrowers to negotiate a reduction in their debt.
What to Do: If a debt collector contacts you, negotiate a settlement for a lower amount than what’s owed and ensure any agreement is in writing before making payments.
Debts settle, on average, at 65.8% less than the original amount owed.
Debt collectors typically sue for around $3,000 but often settle for much less, allowing borrowers to reduce their debt through negotiation.
What to Do: If sued, consider negotiating a settlement for a lower amount and consult a debt settlement professional to ensure the best possible deal.
The average APR on Credit Cards Nearly Doubled (12.9% in 2013 to 22.8% in 2023).
The dramatic increase in credit card interest rates makes carrying a balance more expensive, making it harder for borrowers to pay down debt.
What to Do: Pay off high-interest credit card balances as quickly as possible, transfer balances to lower-interest cards, or explore debt consolidation options to reduce the interest burden.
Methodology
To gain a thorough understanding of credit card debt statistics, we conducted descriptive and comparative analyses of external and internal reports.
We primarily relied on authoritative governmental reports to analyze macro-level credit card debt trends, interest rates, delinquency patterns, and financial well-being in the United States.
Further, to examine credit card debt lawsuits, debt collection trends, and settlement data, we analyzed two internal Solo datasets of 30,000 customers who used Solo to draft and file an Answer to their debt collection lawsuit and 300 customers who used SoloSettle to settle their debts between the years 2021-2024. Our analysis began by cataloging the most frequently involved creditors and the corresponding number of lawsuits filed against borrowers.
We conducted a financial analysis of creditor lawsuits, calculating total and average amounts sued for, along with settlement amounts. We also mapped these lawsuits by U.S. states to identify regions with the most credit card debt cases and the highest lawsuit amounts, revealing trends across different states.
Why Is This Important?
As interest rates climb, so does the cost of maintaining balances. This can create challenges for some borrowers, impacting disposable income and adding financial pressure.
The internal data from Solo reveals that many consumers facing debt collection lawsuits successfully negotiate settlements, often reducing their total debt. This indicates that there are options for individuals who may be struggling with credit card debt, providing hope and practical solutions to regain financial stability. By recognizing these options and promoting accessible debt management tools, we can create a more financially secure environment for consumers.
Therefore, what? This data is a wake-up call to the dangers of reliance on credit without careful management, particularly given that repayment rates, though improved, are hindered by inflation. Focusing on reducing high-interest balances and practicing financial prudence can reduce long-term costs.
For policymakers, there is an opportunity to examine credit regulations and support tools that promote financial literacy and offer debt relief options, which could empower consumers to regain control over their financial health.
Source
- The Federal Reserve: Economic Well-Being of U.S. Households in 2023 (2024)
- The Federal Reserve Bank of New York: Household Debt And Credit Report (2024)
- Consumer Financial Protection Bureau: The Consumer Credit Card Market (2023)
- The Federal Reserve Financial Services: Findings from the Diary of Consumer Payment Choice (2024)
- TransUnion: Credit Industry Snapshot (2024)
- Red Stag Fulfillment: eCommerce Statistics (2024)