Just How Many Americans Are Actually in Credit Card Debt?

Credit card debt can be expensive, but unfortunately it's pretty common for people to carry a balance.

It's definitely understandable that many Americans owe money on their cards, as sometimes keeping up with everyday expenses can be difficult without that extra buying power that credit cards provide.

But just how many Americans owe, and what should you do if you're one of the many who is carrying a balance?

Here's how many Americans are in credit card debt

Credit card debt is the most common type of debt, according to the Federal Reserve. In fact, more than 45% of families indicated they had an outstanding balance due on their cards after making their most recent payment. Among those who owe, the median family had a balance of $2,700 in 2022.

In order to avoid paying interest charges, it would be necessary to fully repay the entire balance owed on a card by the end of the grace period in each billing cycle. However, almost half of all Americans are not paying off their cards in full, as this data shows. They are letting at least some of the money they owe carry over to the next billing cycle.

Since credit card minimum payments tend to be very small -- often somewhere around 2% of the balance due -- it's not surprising that many people don't pay 100% of what they owe each month. The problem is, for all those families in credit card debt, when their next bill comes, it will be even harder to pay it off in full since they'd have to pay the debt that was carried over, interest charges, and any new debts they have incurred over the most recent cycle.

It can become really easy for a card balance to get out of control quickly, and it's easy to see how people get stuck in debt for years as their balance keeps growing each month when they don't pay it back entirely and they charge new purchases on top of old obligations.

What should you do if you owe money on your cards?

If you're one of the 45% of people carrying a credit card balance, dealing with this debt should be a major financial priority. With the average credit card interest rate at 21.47% as of November 2023 per the St. Louis Fed, carrying a balance can make all your purchases a lot more expensive and the payments can make it difficult to do other things with your money.

To get rid of your debt for good, you'll want to make a plan. Some options include:

• Refinancing using a personal loan: Personal loans have fixed payment schedules and the interest rate is usually lower than on cards (it averages 12.35%). If you can reduce your financing costs and get on a set repayment schedule where you're debt free in a few months or a few years, it may be worth doing.
• Paying extra on your credit cards: Paying more than the minimum can bring your balance down. Try to budget as much as you can for card payoff so you can stop the financing charges ASAP.
• Living on a budget: You'll want to stop charging more on your credit cards than you can afford to pay back so you don't keep adding to your balance each month. Living on a strict budget can help you keep your spending down to a level you can afford to fund in cash.

The sooner you start working on your credit card payoff plan, the better off you'll be -- so if you're in that 45%, look into these options today to figure out which works best for you to become free of credit card debt.