Americans Hold $1.33 Trillion in Credit Card Debt, Report Finds

With credit card annual percentage rates still running very high, WalletHub expects credit card debt to climb by $50 billion by the end of the year.

After reviewing newly released Federal Reserve data, WalletHub says U.S. households owed $1.33 trillion in credit card debt at the end of February. That set a new monthly record in nominal terms, although it was about 10% below the inflation-adjusted peak.

The report also notes that the average credit card APR remains elevated, and that burden is one reason WalletHub sees total credit card debt rising by another $50 billion during the year. The latest Credit Card Debt Study includes these main findings:

• Early-year status: Total credit card debt stood at roughly $1.33 trillion, which is about 10% below the inflation-adjusted record for the month.
• Household balances: The average household credit card balance was about $11,036, or $2,128 under the record high.
• Debt-to-deposit ratio: The ratio of total credit card debt to deposits was 7.0%, which is 61% below the peak seen in Q4 2000. Lower is better.
• Interest rates stay high: The average person carrying credit card debt is paying 21.52% interest annually.
• Forecast: WalletHub expects total credit card debt to increase by $50 billion during the year.

5 Tips for Handling Credit Card Debt

1. Keep spending separate from debt. If you carry a balance from one billing cycle to the next, you lose the grace period on new purchases, so interest begins applying right away. Using one card for debt and another for purchases you pay off in full can help avoid added interest.
2. Consider a balance transfer offer. The best balance transfer cards can provide up to 24 months without interest, and some offers are available to people with fair credit or better. A long 0% introductory period can save a significant amount in interest and help you pay down debt faster.
3. Strengthen your budgeting and savings habits. Free or low-cost budgeting apps are widely available, and WalletHub's free tools can help with organizing finances, building a budget, and tracking progress. Better budgeting may create room for emergency savings and debt repayment.
4. Use rewards cards for regular purchases. The right rewards card can return 1% to 2% or more on purchases, and an introductory bonus can add extra value. If you pay the bill in full each month, the interest rate is less important.
5. Work on your credit score. Consumers with stronger credit generally qualify for lower interest rates. WalletHub's database of more than 1,500 credit card offers shows an average APR of 26.65% for fair credit and 17.11% for excellent credit. Better credit can also improve your chances of getting a 0% introductory APR offer.