Average credit card debt increased 3.5% to $6,730 in 2024

The total balance of U.S. consumer credit card debt grew by $92 billion to end Q3 2024 at more than $1.16 trillion. This 8.6% increase outran the overall rate of inflation, which slowly fell from 3.7% to 2.4% over the same period. Still, it is a far cry from the credit card debt growth witnessed from 2022 to 2023, which clocked in at 17.3%.

Anyone carrying a balance from one month to the next knows one culprit to blame for higher balances: high APRs. The average credit card APR was 23.37% as of Q3 2024, the highest it's ever been, according to Federal Reserve data.

At the same time, more Americans are still carrying more plastic, metal and virtual cards than last year. U.S. consumers have roughly 18 million more credit card accounts than in 2023. However, that expansion in 2024, while significant, was less than half the number of new cards added to consumers' wallets in 2023.

"With lenders taking a more conservative approach to new customer acquisition, it may be harder for consumers without a credit history to get approved for their first credit card," Patel says. "Many lenders prefer to see some credit history to assess risk."

The average credit card balance among consumers was $6,730 as of Q3 2024, up by $229 from the previous year's average of $6,501. That increase in revolving credit was more or less in line with inflation, which ranged from 2.4% to 3.7% (at an annual rate) between September 2023 and September 2024.

There was no great deviation among the states in their average credit card balance growth in 2024.

California, Hawaii and, quite curiously, Vermont, were the three states where credit card balances increased the most in 2024: Residents in each state grew their credit card balances by more than 5%. Meanwhile, credit card spending in the Appalachian states of Kentucky, Ohio and West Virginia (as well as non-Appalachian North Dakota) slowed to less than 2% in 2024.

Average balances are higher in states that sport higher annual incomes (Connecticut, New Jersey and Washington, D.C., have average balances exceeding $7,500 in 2024), and/or have higher consumer costs in general (like Alaska and Hawaii).

The average credit card utilization ratio among consumer credit cards remained at 29% in 2024, a relatively good indication that consumers, overall, aren't overextended (although we identify some outliers below).

Generally speaking, a lower utilization has a more positive impact on one's credit score than a higher utilization. When it comes to a good credit utilization ratio, having one below 30% helps avoid more serious damage to your FICO® Score, but staying under 10% is best for scores. You'll still need to check other boxes as well: On-time payments are the most important score factor, but the types of credit you use, the length of your credit history and new applications for credit all influence one's FICO® Score as well.

Looking at utilization by state, it's evident lower credit utilization ratios are generally correlated with higher FICO® Scores, absent other factors. Most states with credit card utilization ratios of less than 30% have credit scores of 720 or higher. Meanwhile, states where credit utilization average is above 30% sport lower average FICO® Scores (and likely higher average APRs).

For the second consecutive year, millennial credit card balances grew faster than any other generation, according to Experian data. The 6.3% jump to $6,932 among millennials last year built on a double-digit percentage leap in 2023. This is also the second year in a row the millennial generation's average card balance was higher than the overall U.S. average. Based on historical debt trends, millennials' average balances will likely remain above the overall national average for years to come.

What changed? There are three identifiable contributors to the recent acceleration of millennial credit card debt balances:

• Rising APRs: While the average APR of 23% isn't kind to credit card borrowers of any age, it puts a bigger squeeze on consumers with larger balances and further accelerates growth. Even worse: Millennials are likely receiving higher APRs than older generations, who have better average credit scores.
• Higher rates of inflation: Even if their wages are keeping up with higher prices, many consumers carrying balances from month to month may still be paying off purchases made in 2022.
• Life itself: Consumers tend to spend more as working adults than generations outside of ages 25 to 54, considered the primary working demographic by the Labor Department. And as many millennials are painfully aware, home purchase costs remain out of reach for many in their generation. Tighter budgets may force consumers of any generation to lean on credit card spending to make up for sharp increases in the costs of housing, driving or insurance, among other higher costs that can't be deferred.

Once again, as in 2022 and 2023, Generation X has the highest average balance among the generations, with one nearing $10,000. That balance is thousands of dollars above the average balances of millennials and baby boomers, who have the next-highest averages. And although Gen X didn't see the highest increase on a percentage basis in 2024, their average balance grew by $434—more than even millennials' $411 increase.

In addition, while lenders appear to be accommodating the additional demand for credit for other generations, Generation X, appears to be in a squeeze. Although their average balances grew by 4.8% in 2024, collectively they've only received 4.9% in additional credit—perhaps an indication that they've hit a ceiling.

Additional evidence that Generation X has a bigger lift than other generations: They aren't as likely to be consistently paying their entire credit card balance each month, compared with other age ranges, according to an Experian survey conducted in 2024.

Finally, consider each generation's demand for additional credit in the broader context of how much of their credit each one is using. On average, Gen Z, millennials and Gen X use more than 30% of their credit, while baby boomers and the Silent Generation use less than 30%. Reading across the groups, the strong relationship between average credit utilization and average FICO® Score becomes quite apparent.

Given the above, and despite the relatively uniform and modest increases in credit card balances in 2024, there's no guarantee the same will occur in 2025. Changing consumer habits could very well result in a turning tide.

An example of newly altered consumer behavior can be found at your local McDonald's: In 2024, the hamburger giant reported that the number of sales made at its stores was lower than the previous year, a decline they expect to persist in 2025. At the same time, customers were spending more per order. In other words, as order costs went up, some consumers were priced out of the market.

If you carry the fast food example over to the broader economy, you'll see other examples of consumers pulling back from more expensive purchases—particularly in the supermarket. Even though inflation had largely been tamed in 2024, more consumers are trading down to less expensive versions of everyday purchases, according to a McKinsey analysis. This includes switching to supermarket private-label brands. That's especially true if the pricier purchases were previously being bought with the types of credit that are now seeing record-high rates.

How Might Credit Cards, and Credit Card Users, Change in 2025?

It's going to be difficult to set expectations for almost any economic issue as 2025 proceeds, and that's above and beyond the trickier forecasts around economic growth, stock prices and bond yields. Even the direction of short-term interest rates, which have been telegraphed by the Federal Reserve for a number of years, could move in either direction in 2025. Renewed inflation may mean rate increases, while a flagging economy could mean additional rate cuts.

But aside from interest rate mysteries, other factors are in play this year:

• APR fatigue: Looking back to 15 years ago, 23% APR was more commonly seen as a rate that consumers just starting out or rebuilding credit would receive. But in 2024, it was the norm, according to Federal Reserve data. That trend will seemingly continue in 2025 as well, despite a 1 percentage point reduction of many credit card APR rates in recent months.
• Tapped-out consumers: According to Moody's analytics, a leading macroeconomic observer, some U.S. consumers are presently "tapped out" from further consumer spending. In other words: Consumers, particularly those with annual incomes below $50,000, will be cutting back on discretionary spending they may currently be financing with a credit card. And while reduced credit card spending could give consumers some breathing room, high APRs will continue to add interest on top of any lingering balances.
• More buy now, pay later (BNPL): To avoid 20% and higher APRs, more consumers are indulging the occasional splurge with interest-free financing. BNPL has become a secondary form of alternative credit for consumers that isn't likely to go away in 2025.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.