Credit card data in 2019: Understanding the trends

Many of the numbers surrounding credit card debt trends are not moving in a favorable direction. Credit card debt held by all Americans topped $1 trillion for the first time in 2018, and since then, the percentage of credit card debt that is seriously delinquent — at least 90 days late — is on the rise.

However, when that $1 trillion figure was first reported in March of 2018, WalletHub senior analyst Jill Gonzalez saw a silver lining.

“We haven’t seen anything like this,” she told ABC News. “Consumer confidence is at its highest point. Since the recession, people have been saving up for houses, cars, new furniture and appliances, which often get charged on credit cards.”

One of the reasons credit card debt continues to go up is that it’s easier to get credit, says Christopher Viale, president and CEO of Cambridge Credit Counseling Corp. “The credit card companies are making it as easy as it was in the 1990s to access a line of credit,” he says.

Unfortunately, salaries have not kept pace, and the cost of living is up, Viale says. Many more people are also carrying over their credit card balances than they used to, a trend that’s costlier because of interest rates and the potential to be charged late fees.

Credit card debt overview

At the end of 2018, Americans owed on average $6,506 in credit card debt. That’s an increase of 2.4% from 12 months earlier, when the average American owed $6,354. Not everyone carries a balance on their card month-to-month. In fact, 57 percent of Americans pay off their credit card debt, but of the 43 percent who don’t, they tend to carry hefty balances, Viale says. And carrying a balance gets expensive. The national average annual percentage rate is 17.74 percent.

• The total revolving consumer credit debt rose to $1.0715 trillion in June 2019, when seasonally adjusted, according to the Federal Reserve. The figure stood at $1.0575 trillion in March 2019.
• Credit card debt fell to $850 billion in the first quarter of 2019. Credit card debt was down 2.5% from the fourth quarter of 2018. However, the figure was at $810 billion in the first quarter of 2018.
• Households with credit card debt spent more money that debt-free households in seven out of nine discretionary categories, including dining/takeout and clothing/shoes/accessories, according to a CreditCards.com poll. In those nine categories, households with credit card debt outspent their debt-free counterparts by a total of $18,281 to $17,891.
• Americans paid a total of $113 billion in credit card interest in 2018, up 12 percent from 2017 and 49% from five years earlier.
• The American Bankers Association uses a number of indicators to measure credit card conditions from consumers’ perspective, including credit card debt outstanding as a share of disposable income. Credit card debt-to-income “is a commonly used ratio to indicate cardholders’ ability to repay their credit card balances,” according to the ABA, and it was at 5.4 percent in the first quarter of 2019 when seasonally adjusted.

Types of credit card users

There are two primary types of people who use credit cards — “revolvers” and “transactors.” 

“Revolvers” carry a balance from month to month and often pay high-interest rates. “Revolvers,” according to Experian, “bear the most watching as a signal that debt levels are growing too high.” If the number of revolvers steadily increases, that could be a sign of trouble.

Do you charge almost everything to earn airline miles and then pay off the full balance each month? If that sounds like you, then you’re one of the “transactors.”

Both revolvers and transactors rose 0.2 percentage points in the fourth quarter of 2018, accounting for 44.4 percent and 30.4 percent of credit card users, respectively. In an encouraging sign, the percentage of transactors has exceeded 30 percent for three consecutive quarters and is at its second-highest level since 2008.

People who don’t use their credit cards are referred to as “dormants.” The number of people labeled “dormants” dropped 0.4 percentage points to 25.2 percent.

Credit card debt by age

The top sources for debt vary by age, but for Millenials, Gen Xers and Baby Boomers, credit card debt is No. 2.

Greatest source of debt

• Millennials: Personal education loans 21%, Credit card bills 20%, Mortgage 11%
• Gen Xers: Mortgage 32%, Credit card bills 29%, Car loan 7%, Personal education loans 7%
• Baby Boomers: Mortgage 25%, Credit card bills 25%, Car loan 8%

Credit card debt by state

Consumers living in the Midwest tend to have the smallest amount of credit card debt on average. The cost of living, availability of affordable housing, a state’s economy, employment rate, and access to financial education can all play a role in the amount of credit card debt carried by the residents of each state.

• Iowa: $6,726
• Wisconsin: $6,737
• North Dakota: $7,068
• South Dakota: $7,199
• Minnesota: $7,351
• Michigan: $7,382
• Indiana: $7,393
• Kentucky: $7,428
• Mississippi: $7,433
• Montana: $7,444
• Maine: $7,466
• Vermont: $7,466
• Nebraska: $7,515
• Idaho: $7,518
• West Virginia: $7,563
• Oregon: $7,582
• Ohio: $7,654
• Missouri: $7,706
• Arkansas: $7,727
• Utah: $7,727
• Pennsylvania: $7,888
• Kansas: $7,964
• Alabama: $7,967
• Massachusetts: $7,994
• Tennessee: $7,996
• North Carolina: $8,062
• Louisiana: $8,110
• South Carolina: $8,124
• California: $8,144
• Rhode Island: $8,162
• Illinois: $8,168
• Oklahoma: $8,197
• Wyoming: $8,199
• Nevada: $8,250
• New Hampshire: $8,252
• Delaware: $8,255
• Arizona: $8,265
• Washington: $8,318
• New Mexico: $8,323
• Florida: $8,363
• Hawaii: $8,423
• Colorado: $8,463
• New York: $8,510
• Georgia: $8,738
• New Jersey: $8,959
• Connecticut: $9,000
• Maryland: $9,009
• Texas: $9,100
• Virginia: $9,120
• Alaska: $10,685 

Credit card delinquency rates

The percentage of credit card debt that is seriously delinquent — at least 90 days late — continues to rise and reached 8.3 percent in the first quarter of 2019. 

Percent of Balances 90+ Days Delinquent:

• 2016, Q4: 7.1 percent
• 2017, Q4: 7.6 percent
• 2018, Q4: 7.8 percent
• 2019, Q1: 8.3 percent

When it comes to using credit, it pays to be prudent. Of people age 35 and older, only 48 percent pay off their balance each month. Paying off your debt in a timely manner before the interest becomes a major burden can make a big difference, Viale says.