Carrying thousands in credit card debt has become normal for many Americans. The average credit card balance as of the third quarter of 2023 was $6,501, according to a 2024 Experian report. That’s a 10% increase from the third quarter of 2022.
In the final quarter of last year, overall credit card debt passed $1 trillion, according to the Federal Reserve Bank of New York. Though inflation has been cooling, repeated Fed rate hikes have also caused credit card interest rates to grow, making it more expensive to carry a balance.
However, at least for now, the Fed has opted to pause its aggressive rate-hike strategy. So while interest rates won’t be increasing for the moment, they’re still holding strong at just above 20%.
The pause in rate hikes gives Americans a chance to chip away at some of their existing credit card debt.
Below, we’ll break down what average credit card debt in the US looks like using the latest data from Experian and walk you through a few strategies to pay off your credit card balances.
Average US credit card debt by generation
| Generation | Average credit card debt |
| Baby boomers (born 1946-1964) | $6,642 |
| Generation X (born 1965-1980) | $9,123 |
| Millennials (born 1981-1996) | $6,521 |
| Generation Z (born 1997-2004) | $3,262 |
This breakdown shows the average credit card debt and credit utilization in the US by generation, courtesy of Experian’s March 2024 report. Generation X carried the highest credit card debt, followed by baby boomers and millennials.
As credit card debt increases, typically so does credit utilization. Credit utilization -- the ratio that represents the amount of debt you carry compared with the amount of credit you have available -- increased from 28% in 2022 to 29% in 2023. A high credit utilization rate means you’re using up more of your available credit, which can cause your credit score to drop.
Average US credit card debt by state
Experian’s 2024 state-by-state credit card debt overview shows states with the most credit card debt on average -- all above the nation’s $6,501 average.
Here are five states/areas with the highest balances:
- Alaska: $7,863
- Washington, DC: $7,548
- Connecticut: $7,381
- New Jersey: $7,401
- Maryland: $7,282
Meanwhile, these states had the lowest average credit card balances:
- Mississippi: $5,415
- West Virginia: $5,348
- Kentucky: $5,304
- Iowa: $5,227
- Wisconsin: $5,242
While these states had the highest and lowest average credit card debts, others saw large increases in the amount of credit card debt people carried.
Nevada’s average debt increased by 13.1% to $6,987, Utah’s debt increased by 13.3% to $6,271, and Idaho had a 13.4% increase to $5,876.
How rising interest rates affect credit card debt
When the Federal Reserve increases the federal funds rate, it creates a domino effect that typically leads to -- among other things -- banks increasing the variable APR on credit cards.
The federal funds rate is still holding at its height of 5.25% to 5.5% when the Fed last voted to increase it in July.
When your credit card APR rises, you accrue more interest on unpaid balances, which can add months or even years to your repayment time frame while costing you more overall. That’s why experts highly recommend paying your variable interest debt off as soon as possible.
How credit card debt impacts your credit score
The more credit card debt you have, the more likely it will impact your credit score. Your credit utilization -- the amount of debt you carry compared with the amount of credit you have available -- plays a significant role in determining your credit score.
As your credit card debt grows, your credit utilization ratio typically increases, causing your credit score to drop. Lenders may see you as a riskier borrower if you use a high percentage of your available credit. That can lower your chances of approval for other credit cards or loans and increase the interest rate you’re offered on credit products.
When you pay down your credit cards in full each month, you may see an increase in your credit score as your credit utilization decreases. Paying your bill on time also helps boost your credit score.
Ways to pay off credit card debt
Juggling everyday expenses, saving money and paying down debt can be challenging. If you’re struggling with credit card debt, here are a few debt payoff methods to help clear your balance.
1. Create a budget and repayment goal
There may be room in your budget to put more money toward your credit card debt. Take a look at your expenses to see where you can scale back, even temporarily. Consider canceling streaming subscriptions or services you no longer use. Budgeting apps can also help you see where your money is going and if you can cut any expenses. Once you understand your budget, you can create a debt repayment plan.
There are many different strategies for repaying credit card debt, which usually advise paying more than the minimum payment to reduce interest and help pay down your debt sooner.
Among two of the more popular options:
- Avalanche method. With this method, prioritize your debts by concentrating on the card with the highest APR. You’ll still pay the minimum on all your cards but put extra money toward the card with the highest interest rate. When that card is paid off, you’ll put all the money toward the next highest APR card. This method can help you save the most on interest.
- Snowball method. Alternatively, you could pay down the cards with the smaller balances first, which can help you build momentum and see more progress faster.
2. Get a balance transfer card
Opening a credit card with an introductory 0% APR on balance transfers can help you pay off your credit card debt while saving money on interest. A balance transfer card lets you combine different credit card balances onto one card so you can combine your debts into one monthly payment plan and potentially avoid accruing interest during the introductory period.
Balance transfer cards that offer 0% introductory periods typically come with balance transfer fees that you should consider. And, if you can’t pay your balance in full by the end of the introductory period, the credit card’s APR will kick in, and you’ll begin accruing interest on your outstanding balance.
Applying for a new credit card requires a hard credit check, which may ding your credit score temporarily.
3. Consolidate your debt
If you need to pay off several credit cards, it may be more affordable to consolidate your debt with a personal loan. You’ll have a fixed interest rate and predictable monthly payment, which can be easier to manage than multiple credit card payments with different APRs. A personal loan also tends to have a lower interest rate than most credit cards.
Applying for a loan also requires a credit check and the lender may charge an origination fee..
4. Consider adding a new income stream
If you want to pay off your debt faster, consider taking on a side hustle to earn some extra money. Side hustle opportunities might include starting your own business, freelancing, driving for ride-hailing services or even walking dogs. You also can try to sell gently used items that you don’t use to put a few extra bucks toward your debt.
As you earn more money from your side hustle, add it to your debt payoff plan.
The bottom line
The average American credit card debt is in the thousands. As inflation continues to push up the prices for many everyday essentials, many people are turning to credit cards to bridge the gap. But paying off this debt is also becoming more expensive as APRs rise.
Paying more than your minimum credit card payment can reduce the amount you’ll pay in interest. If you have credit card debt, consider a 0% introductory balance transfer card, personal loan or other debt repayment strategy.
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