Credit card debt is on the rise, reaching levels not seen since the early days of the pandemic. Half of credit cardholders now carry a balance from month to month, up from 44% in January and the highest rate observed since March 2020, when 60% of cardholders carried debt, according to a new Bankrate survey. The surge in credit card debt is largely attributed to persistent inflation and soaring interest rates, which have made it increasingly difficult for many Americans to manage their finances.
Generational Debt Trends:
- Gen Z (ages 18-27): 42% carry a balance
- Millennials (ages 28-43): 53% carry a balance
- Gen X (ages 44-59): 60% carry a balance
- Boomers (ages 60-78): 48% carry a balance
The Big Picture: Economic factors such as inflation and high interest rates are making it increasingly difficult for Americans to manage their credit card debt.
- Inflation Impact: 34% of debtors report that inflation has worsened their debt burden since 2022.
- Interest Rate Impact: 32% cite high interest rates as a significant factor in their growing debt.
What They’re Saying: “Credit card balances fell sharply in 2020 as many Americans spent less during the pandemic and used stimulus funds to pay down debt,” said Ted Rossman, a Senior Credit Card Analyst at Bankrate. “Since the beginning of 2021, however, credit card balances have been off to the races.”
By income level:
- Under $50,000: 58% carry a balance
- $50,000 – $79,999: 54% carry a balance
- $80,000 – $99,999: 46% carry a balance
- $100,000+: 43% carry a balance
Persistent Debt: The length of time Americans are carrying credit card debt is increasing. Sixty percent of those with credit card debt have been in debt for at least a year, up from 50% in 2021.
Generational Persistence:
- Gen Z: 51% have been in debt for over a year
- Millennials: 58% have been in debt for over a year
- Gen X: 61% have been in debt for over a year
- Boomers: 65% have been in debt for over a year
Income and Persistence:
- Under $50,000: 62% have been in debt for over a year
- $50,000 – $79,999: 56% have been in debt for over a year
- $80,000 – $99,999: 61% have been in debt for over a year
- $100,000+: 62% have been in debt for over a year
The Bottom Line:
