WalletHub analyzed Federal Reserve data that was just released and found that even though credit card debt hit a new record high of $1.32 trillion in November 2024, it’s actually $118 billion below the record from 2007 when you adjust for inflation. Despite the average credit card APR decreasing due to the Fed's recent rate cuts, WalletHub projects that credit card debt increased by $90 billion during 2024. You can find other takeaways from WalletHub’s latest Credit Card Debt Survey below.
- Holiday Debt Explosion: More than 1 in 10 people say that the holidays blew up their credit card debt.
- No Exit Strategy: 46% of Americans don’t have a debt payoff plan.
- Debt Growth Ahead: Nearly 1 in 5 people say they will have more credit card debt by the end of 2025.
- Post-Holiday Balance Transfers: Nearly 1 in 5 people are planning to transfer their holiday debt to a new credit card.
- Inflation vs. Credit Card Debt: 6X more Americans are most worried about inflation, compared to credit card debt.
“We expect to see a $90 billion increase in credit card debt for the year when the final 2024 numbers come in. This is not surprising considering that 46% of Americans don’t have a debt payoff plan, according to a new WalletHub survey. However, people are still optimistic about their financial prospects in the new year. For example, fewer than 1 in 5 people think they’ll have more credit card debt by the end of 2025. That might be wishful thinking given recent history, especially for those who don’t have a payoff plan, but if more people follow a strict budget, reduced credit card debt could become a reality. Of course, inflation makes budgeting more difficult, and it’s inflation – not credit card debt – that people really fear.”
- John Kiernan, WalletHub Editor
5 Tips for Dealing With Credit Card Debt
- Separate your everyday expenses from your debt. When you carry a credit card balance from billing period to billing period, you lose your grace period for new purchases. That means interest starts applying to new purchases right away. But if you use one card for ongoing debt and another for everyday purchases that you can pay off by the due date, the everyday purchases should never accrue interest charges.
- Use a balance transfer deal to lower the cost of existing debt. The best balance transfer credit cards can give you a break from interest charges for as long as 21 months, and attractive offers are accessible to individuals with fair credit or better. A prolonged 0% introductory period can yield significant savings on interest, helping you get out of debt faster.
- Use a rewards card for everyday spending. You can save 1% to 2%+ on every purchase with the right rewards card. You might also save a couple hundred dollars with an initial bonus. And if you plan to pay the bill in full monthly, the interest rate won’t matter.
- Improve your budgeting and saving efforts. There are several good budgeting tools available to consumers for free or a low cost. For example, WalletHub’s free budgeting tools can help you get organized, set up your budget, and analyze your performance. Taking ownership of your budget can help you free up some room for emergency fund contributions and debt payments so you can get out of debt and stay there.
- Work to improve your credit score. People with higher credit scores tend to pay lower interest rates. For example, the average APR among credit cards for people with fair credit is 26.79%, while the average for people with excellent credit is 17.9%, according to WalletHub’s database of 1,500+ credit card offers. Having good or excellent credit also makes it easier to get credit cards with a 0% introductory APR.
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