The Average American Has $7k in Credit Card Debt

Did you know that the average American credit card holder has an unpaid balance of $6,993? And, the average Canadian has an unpaid balance of $4,265.

This week we’re talking credit cards and financial health.

Here’s some rapid fire info that is true for American credit card holders as of 2023:

  • the average credit card holder has an unpaid balance of $6,993
  • only 50% of credit card users are confident that they’ll be able to pay their next credit card bill in full
  • nearly 25% of credit card holders are extremely “unconfident” that they’ll be able to pay their next bill in full
  • about half of all credit card users don’t know their interest rate and the average credit card interest rate is 24.08%
  • Q3 of 2023 had the highest level of credit card delinquency rates since 2012
  • delinquency rates have increased every quarter since 2021 and this trajectory suggests that the 2012 number will be surpassed in Q4 of 2023 or Q1 of 2024
  • if you regularly miss payments your credit card company can increase your interest rate, which can reach the 30% range

Some thoughts

These stats tell us that the average America holds credit card debt. In other words, the average person is spending beyond their means AND many of the folks with debt are unclear just how much interest they’re paying on that debt if they don’t know their interest rate.

Let that sink in for a second. The average adult in the US carries consumer debt. Spending beyond our means is a normal part of life in 2024.

It also makes sense why someone might feel uncertain about their ability to pay their credit card balance if it’s sitting at around $7k.

Minimum Payments

Minimum payments are not designed with the credit card holder in mind, if they were they’d be a lot higher. A minimum payment is the minimum amount, or the smallest amount of money that you must pay towards your credit card bill. Basically, this is the amount between you an credit card delinquency.

Minimum payments are designed with banks in mind. They maximize the length of what is in effect a loan and therefore the amount of interest a bank can charge you.

Let me give you an example to illustrate the point

Your bank charges you interest on the money you don’t pay back at the end of the month. So, let’s say you spend $2000 in December. You have an interest rate of 24% and an initial minimum payment of $10. If you make a payment of $100 that satisfies your minimum payment requirement, but you’re now carrying a balance of $1900, and you will be charged interest of 24% on the $1900. Your interest compounds monthly.


Taking this $2000 example:

If you make a $50 payment each month, which is slightly more than the interest, it will take you approximately 85 months to pay that off. The approximate total interest would be $2188. So, 48% of your payment would go towards the principal (the initial balance) and 52% towards the interest.

For reference, 85 months is just over 7 years. If you paid $100 a month, you would have paid $600 in interest and it would take you 27 months to pay off your balance.

If you wanted to pay off your credit card balance in one year, you’d have to make monthly payments of $191. You’d pay $273 in interest, or 12%.


If you’re caught in the minimum payment cycle this example is NOT meant to shame you. The banking industry has a vested interest in hooking people into the minimum payment cycle and banks provide little education to help their customers understand what they’re about to get into.

The example is meant to illustrate the impact of compounding interest and how “a little extra” can go a long way. If you have credit card debt, it might not feel like paying an additional $10 a month would make a difference. But, in our scenario, of an initial balance of $2029.63 (after the first payment) if you were to pay just $10 extra month on top of the $50. You’d pay your balance down in 57 months instead of 85. That’s HUGE.

All of these examples are a bit moot if you’re still using your credit card and increasing your balance.

I’m not trying to imply that if you skip your avocado toast or buy less coffee your financial woes will somehow be over. No. There are a lot of systemic issues as well as personal choices that can be at play.

Some examples

  • lack of financial education or literacy in high school and/or college that includes knowledge on interest, compounding interest, interest rates, budgeting, mortgages, mortgage insurance
  • rising cost of living
  • predatory banking practices
  • predatory and incessant advertising
  • capitalist culture and beliefs
  • overspending

So, let’s take this opportunity to do a temperature check

  • do you know your credit score?
  • do you know your interest rate?
  • how confident are you that you’ll be able to pay off your next credit card bill?
  • how many times in the past 12 months were you late or unable to pay your credit card bill in full?

I’d like to close with an awesome resource that will be helpful to those looking to pay off credit card debt. has a  calculator you can use to help you establish a payment plan for paying off your debt.  Once you enter in your interest rate and current balance you can use the other inputs to determine how many months you’ll need to pay off your cards based on different payment amounts.

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