Average amount of credit card debts owed can range from a few hundred dollars to several thousand dollars, depending on location. Credit card companies provide introductory rates and low balance transfer rates, enticing consumers to use their cards. Unfortunately, they do not tell consumers how much they will owe in the future and usually only provide the annual percentage rate and not the total due.
The average amount of credit card debt incurred by consumers in each state can differ greatly depending on location. Those living in Alaska actually had the highest average credit card balance in 2021, at an average of nearly $8,000 per individual. Residents of New Jersey also had the second highest amount of average credit debt, at an average of nearly $7,500. Connecticut was the third-most-commonly-occurring state for average credit card balance transfers, at approximately $5,912.
The highest average credit card balance transfers occur among African American consumers. The average African American credit card balance transfer amount is about twice that of the average non Africans in the U.S. This pattern is similar to the trend of higher balances among college students.
College students are a group of people with unique needs when it comes to debt management. Young adults and single adults are typically struggling to make ends meet. College students use their credit cards heavily, often buying books and other necessities that accrue little interest. College students can experience significant financial strain when they leave school and must begin paying off credit cards. These same students are usually much more aware of how much debt they carry and are typically willing to act on their own when it comes to paying down debt.
Middle-aged and older Americans are also confronting more issues with credit cards. The average American male is carrying average credit cards debt of approximately five thousand dollars, up from about three thousand dollars in the past. This increase is due to a number of factors, but the primary reason for the spike is the rising costs of everything, especially oil prices. Many middle-aged and older Americans are now finding it more difficult to make ends meet.
Another trend that suggests that more consumers will face more problems with credit card debts in the future is the projected rise in the number of bankruptcies. As the number of bankruptcies increases, the number of consumers filing new bankruptcy claims also increases. Bankruptcy filings will likely increase in the next few years because more consumers will face high credit card debts.
Credit card balances can only go so high before consumers start to suffer from too much debt. If consumers continue to charge high balances on their accounts, it will become harder for them to pay off their debt without incurring more debt. Many consumers make the mistake of charging on their card simply because they don’t have enough money to pay the bill at the end of the month. This strategy makes it much easier to rack up large amounts of debt because consumers will continue to charge even if they don’t have the money to pay the debt off right away.
Americans that pay their bills off every month will have lower debt and will have time to make larger purchases. Americans that struggle to pay their balances off every month can expect to be stuck with high interest rates and will often be required to pay late fees and finance charges, which further increases the amounts of money they have to pay each month. High balances on credit cards make it difficult for consumers to obtain a loan or secure a job. Fortunately, there are now many companies that will work with credit cardholders to find solutions for high balance debt.