Credit Card Debt and the US Consumer - One Trillion Dollar Tab

$1,000,000,000,000 (this crazy looking number is called one trillion) plus dollars of credit card debt is currently carried on the shoulders of the US consumer. This is such an astonishing milestone that I decided to do a little research and report on US consumer credit card debt. And I'm glad I did because this research led to some very interesting statistics and information.
Consumers have countless credit card choices

The credit card has become as American as apple pie. We all have a credit card and most of us have more credit card debt than we would care to admit. These financial products have been the grease in the wheels allowing the US economy to flourish and grow at astonishing rates over the past several decades.

To the US consumer, charge cards have become a part of life. They are a household staple, a right of passage to adulthood, and even a symbol of economic status.

Credit cards can be a great financial tool. Especially for those with wealth. The better a person's credit and purchasing power the better the credit card program. These consumers will enjoy lower interest rates, higher spending limits, better perks, and greater rewards.

On the other hand, for some individuals, these revolving credit accounts can be the catalyst towards financial doom. Thousands upon thousands of college kids have had to file bankruptcy as a result of overspending. The interest rates can be has high as 36% so when these youngsters get in over their heads the situation can quickly snowball and become unmanageable. This results in either bankruptcy or if they are lucky some can settle credit card debt through negotiations with the credit card company.

So we can all agree that credit cards can be both good and bad. They help the economy and the world of finance and business. They have a lot of great benefits for responsible borrowers. Yet they can be a little dangerous for those who are prone to an occasional financial mistake. Now, let's dig a little deeper and take a look at the facts of our credit card use as a nation.

US Consumer Credit Card Debt Facts

  • The average US household credit card balance is just a few dollars shy of $16,100.
  • The average card interest rate is 19.4%.
  • The average US household pays over $1,330 dollars in interest every year.
  • Since 2012 total credit card debt has increased by 10.5%
  • Approximately 1 out of 2 Americans carry a credit card balance.
  • US Consumers as a whole have a card balance just over one trillion dollars. Let's write that numerically again just to see how absurd that number really is; $1,000,000,000,000.00 - WOW!

Other Interesting American Borrower Facts on Debt and other Financial Behavior

  • Average US Household has a total debt of more than $130,000.00. This figure includes all debt such as a mortgage, car loans, etc.
  • Average US household debt has increased over 50% since 2002.
  • US consumers have a total of 1.4 trillion dollars of student loan debt. That's about 40% more than credit card debt.
  • Student loan debt has increased 186% since 2007.
  • Over the last 13 years, US households are falling behind in terms of income to cost of living. Check out the stats below...
    • Average income has increased 28%
    • Cost of living has increased 30%
    • Medical Expenses have soared a whopping 57%

Final Financial Analysis of the Financial Data

So we have laid out some solid figures pertaining to the financial health of American families. So what are the implications of this data?

This information leads me to believe that US households are doing OK. Income is on the rise. We are spending and borrowing more which implies that we are confident in our economic future. This is the good news.

The bad news is that technically the cost of living is growing faster than our income is rising. This means we are getting poorer. I'm not freaking out over this. The deficit isn't huge. Also, I think it is clear that the real problem is the medical expenses. Once we are able to get that side of things under control we should fix the deficit and even make some gains.

I also want to mention that this student loan debt is a bit out of control. I think we should tighten up the government-backed lending.

Final Thoughts on Credit Cards

I think most people would agree with me when I say I have mixed feelings towards credit cards. However, my bottom line is definitely pro credit card. 

Though people have and will continue to run into financial problems as a result of credit card use, in the end, it's not the credit card that's the problem. It's the credit card holder who is the problem.

Also, credit cards have done so much for the economy that they are invaluable in some respect. They have drastically increased the availability of business opportunity.

My final argument that favors the use of credit cards has to do with the consequences of not using them. If a consumer uses cash instead they are at a disadvantage compared to the exact same consumer who does use a credit card. This is because of the cash back reward programs. Everyone pays for those rewards as the credit card fees increase prices, but only credit card users can benefit from that program.

This only leaves one more question to ask...

What's in your wallet?

Related Articles

Credit Card Bill of Rights

About My Research and Sources
You may be asking yourself where I got all this cool information on credit card debt and othe US consumer financial information. I made a list below of third parties that I used to research this financial and economic information.

  • US Census 
  • Federal Reserve Bank of New York
  • Nilson Report
  • Nerd Wallet
  • CNBC


  1. Wow, 1 trillion dollars?! :O
    That's a lot!!
    Incredible post, thanks for sharing.

    1. I know!! It is hard to believe. Truthfully I can't really get my head around how much a trillion dollars really is. A little scary.

      Thanks for checking out my finance blog!

      I went to yours... Very Impressive!! You do a great job.

  2. Thank you so much! And yes, I agree - after a certain point, all numbers seem equally enormous... Still, it is worrying!!

  3. That much debt seems overwhelming. I must confess that I am a typical credit card user. My personal finances actually match up pretty closely to some of the financial stats you laid out here.

    Thanks for the great post on credit card debt! I found it very interesting. Great job Young Finance Guy!!

    1. Hey Daren, Yeah it is overwhelming to say the least. I to have some debt and we are certainly not alone as you can see from those financial stats.

      Thank you for the very kind words of encouragement, and for checking out my finance blog!!

  4. No doubt a trillion dollars is mind boggling but this is not the first time we have been at thins level. Americans passed the one trillion in credit card debt right before the housing bust. Through the mortgage crisis the debt level pulled back significantly but it would seem if we are right back at it!

    Hopefully we are able to handle this level of financial obligation.

    - Dan S.

    1. Yes that is correct we did hit a trillion in card debt right before the mortgage crisis. Thanks for adding that great fact to the conversation!!

  5. Great Post Finance Guy! I really enjoyed the interesting stats on consumer credit cards and consumer debt. Both Eye opening and Jaw Dropping LOL.

    It seems like you put a lot of hard work and research here. I really appreciate that.


  6. I agree with Young Finance Guy that the amount of blind education lending is getting way out of hand. I actually know two individuals who are what they call "career students". Meaning that they take a couple classes every semester and continuously borrow more and more money that they use as income. They plan on doing this forever and forever.

    This is a clear abuse of the system and these folks should be arrested.

    1.4 trillion is just to much

  7. Hello and good eve fellow financiers & all those dedicated to either seeking and or maintaining a lucrative, financial worry free, do as you want whenever you want (within moral and legal boundaries) type of lifestyle. Id just like to it out there if you didnt know and also remind you if you did know that climbing the pyramid of capitol is very possible to almost everyone out there with half a brain, a little common sense, and a lot of monetary discipline. That last one is very important, and its something I still struggle with but am determined to make one of my greatest strengths. I recently started reading about the biblical money code and it definitely makes sense. As long as you are out to earn for the right reasons and keep priorities in check than a piece of the pie (the pie being all the money in the world put together) is available to anyone. Just remember do it for the right reasons, have patience, and hang in there and keep on the grind. You will succeed!