The percentage of Americans with credit card debt has increased significantly over the past two years, making high-income households more likely to have this type of long-term debt.
A new study from Bankrate.com found that 54 million Americans have had credit card debt for at least a year, representing 60% of the population in 2023, compared to 50% two years ago. There is no change from 1 year ago.
Statistics show that households with an annual income of $100,000 or more are more likely than low-income households to be in debt to credit card companies for at least one year and at least five years.
Of this wealthiest income group, 72% have held credit card debt for one year or longer, and 27% have held it for at least five years. For households earning less than her $50,000 a year, the one-year figure drops to 53%, and the five-year figure is just 13%.
However, low-income households are more likely to have credit card debt at all: 53% in the $50,000 or less group, 48% in the $50,000 to $79,000 group, and $80,000 to $99,999. group is 44%, 38%. For those over $100,000.
Gen X (ages 43-58) and Gen Z (ages 18-26) cardholders are more likely to keep their monthly balances (53% each) compared to 49% of millennials (ages 27-42) 52% and 41% of cardholders and baby boomers (aged 59-77). But the millennial is more likely to have credit card debt for at least a year.
Increased debtor behavior
Overall, almost half (47%) of respondents have monthly debt, which is slightly higher than in 2022 (46%) and up from 39% in 2021.
Bankrate senior industry analyst Ted Rothman says more people are taking on more debt and living at higher interest rates.
“Credit card debt is easy to get in, but hard to get out,” says Rothman. “Contrary to popular belief, driving people into debt is usually very real. If you make only minimal payments on your average balance, you will be in debt for nearly 20 years.”
Rothman added that interest rates on credit cards are often three, four or even five times higher than other common financial products.
