How Many Americans Have Interest-Bearing Credit-Card Debt?

Not everyone has credit cards, and only a portion of those that have credit cards have revolving balances that accrue interest: a stroll through the data.

By Wolf Richter for WOLF STREET.

The short answer: Only about 28% of adult consumers (18 years old and over) have one or more cards with interest-accruing balances. But amazingly, this is not something we can just easily look up in one place. But we can approximate it the hard way.

The discussion below is not based on some kind of internet survey of 1,000 consumers that eagerly volunteered to participate in yet another silly internet survey.

Instead, the discussion relies on hard data that has been collected by consumer credit bureau TransUnion based on credit-card activity and account holders in the US; by the American Bankers Association based on data from member banks; and by the Federal Reserve, based on banking data.

The long answer:

Credit cards are the dominant consumer payments method in the US. According to the most recent payments study by the Federal Reserve, $4.9 trillion in spending was paid for by credit cards in 2021. Debit cards were used for $4.6 trillion in transactions.

The amounts will be higher for 2023 because prices have gone up, and spending overall has increased, and people have gone on a travelling binge, and nearly all travel expenses are run through credit and debit cards. Credit-card balances are largely a measure of spending – not of borrowing.

Each of the other payment methods (ACH, checks, cash, etc.) lagged far behind credit cards and debit cards.

Most of these amounts that are paid with a credit card are paid off the next month and never accrue interest. And we’ll get there in a moment. Most consumers with credit card collect their 1% or 2% cash-back, or their double-miles, or loyalty points, or whatever, feel good about the kickback, and pay off their cards by due date.

Total credit card balances in Q2 rose to $1.03 trillion. But only a small portion of credit-card spending gets stuck as interest-bearing debt. The vast majority of that $1.03 trillion just flows through the accounts and gets paid off by due date the next month and never accrues interest. Credit-card balances are month-end balances: most will be paid off in full by due date and never accrue interest; some will not be paid of in full by due date and accrue interest.

The data from the Federal Reserve and others that report credit card balances don’t split out interest-accruing credit-card balances from balances that are paid off in full on due date and never accrue interest.

But we can use other data to approximate the portion of adults in the US that actually have interest-accruing credit card debt.

So step by step:

1. Only 166 million consumers have credit cards at all, according to consumer credit reporting agency TransUnion (Feb 2023 report). So that’s only about 64% of the 260 million adults (18 and over) in the US.

2. The remaining adult consumers have only debit cards or no card at all. Remember, debit cards were used for $4.6 trillion in transactions in 2021, according to Federal Reserve data cited above. Other people pay by check or cash. None of these methods allow consumers to incur interest-bearing debt (though fees may apply if they overdraw their checking accounts).

3. Only 43% of credit cards have “revolving” balances, meaning interest is accruing on those balances, and cardholders have to pay that interest. And 57% of credit cards do not have any interest-accruing balances, and there is no interest to pay. This data is from the American Bankers Association (ABA), based on data from banks in its latest report (for Q3, 2022).

4. The ABA doesn’t count “credit card holders.” It counts “credit cards.” Many people have multiple credit cards. So if someone has four cards with revolving balances, that counts as “4,” not as “1” in the ABA data.

5. With only 64% of adult consumers having credit cards, and with only 43% of credit cards accruing interest, it pencils out that very roughly 28% of adults in the US have one or more credit cards with balances that accrue interest (43% of the 64% that have cards).

That very roughly 28% of consumers who have interest-accruing credit card balances is still a pretty big number. And they have to pay usurious interest rates on their credit card balances. Among them are people that, for example, might have bought some furniture for their new house, who will make an all-out effort to pay it off ASAP to get rid of the interest charges. And it includes people who got into credit card debt way over their head, cannot even pay the 30% interest accruing on their balances, and end up falling behind and defaulting.

We discussed overall credit card balances in dollars and as percent of disposable income, total available unused credit, serious delinquencies, transition into delinquency overall, and transition into delinquency by credit score here. And to check on the Hangover of our Drunken Sailors, we discussed consumer foreclosures, bankruptcies, delinquencies, and third-party collections here. All this makes a lot more sense once we understand that very roughly, only about 28% of adults have interest-accruing credit-card debts.

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  165 comments for “How Many Americans Have Interest-Bearing Credit-Card Debt?

  1. Timothy J McLean says:

    I just got a B of A CC with a $19k limit. It is interest free until March 2025. I don’t really need it, but I’m happy to ride B of A’s generousity.

    • Jason says:

      Good point. I wonder how many of those “interest-bearing” cards are 0% promo rates.

    • Digger Dave says:

      We carry anywhere from $20-30k on credit cards consistently. We own three rental properties in northern New England and I’m a tradesmen. We do most of the work on our own properties. They’re all on 0% no annual fee offers – most are unsolicited and run from 15 to 21 months. Been doing projects this was for over a decade. I keep paying them down before the 0% offers expire (thanks Excel!) and haven’t paid one cent in interest. I keep thinking that this gravy train will end and then another 0% shows up in the mail and the process continues. I think we have 25 credit cards now. One is for groceries and gas only, one is for general household expenses and one for business expenses, all getting 1.5-2% points. The rest sit dormant and fluff up our credit score.

      If they want to keep offering us 0% project loans, I’d be a fool not to keep taking them up on the offers.

      • Blue says:

        You may be aware, that having too many open lines of credit hurts your chances of borrowing on houses at good rates, even unused.

        • Digger Dave says:

          Not true. Number of cards is not a credit score factor. Utilization of credit is the score killed. The more you increase your total available credit without increasing debt, the better off you are. Our scores are consistently in the 800s. Our credit available is somewhere north of $250k. They see $20 to $30k on $250k, sometimes less than 10% of credit available, sometimes more. When we hit more our scores decrease mildly. The 10% threshold matters.

          These cards have been opened slowly over more than a decade. Hard credit hits are limited. We own rental properties and our rates on those properties (local commercial paper) are rock bottom. Due to this website I had the good sense to re-do our 5 YR ARMS before rates climbed.

          Been playing this game for awhile. If too many cards were an issue, we’d close some.

          FYI our home is paid off. Could not care less about mortgage rates for primary homes – we prefer no payment and owning our house outright. No debts on cars or anything else, just the rental properties, so credit scores don’t really matter to us anyway. When we obtain financing for the rental properties it is with a local bank and a local banker that has known us for years. We own three properties now but have owned many more in the past. Our commercial banker knows we are a safe bet – done a dozen or more loans with him (he periodically calls to see if there’s anything we’re interested in, and when foreclosures were a thing he called us with the inside scoop about REOs they were about to repossess). The local market and business history with a community bank mean they don’t even care about our credit scores anymore. They know we are capable landlords and do our homework. The paperwork for a loan takes about 5 minutes – a pro forma and tax returns is all they ask for on the property.

      • Gooberville Smack says:

        You are so amazing. Please tell us more. How do you do it?

    • Kenn says:

      Read the terms and penalties CAREFULLY.
      I used to work with B of A credit cards, and saw all the promotions they offered at that time. Basically, the most generous promotions had the nastiest penalties for missed / late payments. Any deviation from the terms of the offer would become a “Promotion turn off event” and start the penalty interest rates.
      The credit card rules for interest rate changes has been updated since I worked there, but I would still advise you to read the fine print carefully. They do not want to be generous, but if you carefully follow all the rules, you can come out ahead.

  2. John Griffith says:

    I run most of my charges through Amex – no interest but a nice annual fee and a big penalty if I miss a due date. I also have a Visa that will run a balance even though I pay on it every month. I also use cash a lot but I don’t use any checks. I am probably pretty much Mr. Average.

    • Bobber says:

      They always waive late payment penalties if you threaten to cancel the card.

      • Whitten says:

        Yea I was gonna say this too. I’ve forgotten to pay once and my husband just forgot once last month and he called and they took off interest and penalty. They might be doing this because we have good history but I thought it was nice of them (Amex).

  3. Al Loco says:

    I have heard CC companies have reduced resources for new account acquisition to preserve cash for charge offs. They must smell something.

    • Wolf Richter says:


      New account openings have surged, see first comment here, LOL. Hitting record after record:

      And available unused credit has surged:

      Banks have raised the aggregate credit limits on credit cards to a record $4.6 trillion. With only $1.03 trillion in credit card balances outstanding, the total available unused credit rose to a record $3.57 trillion (the-sky-is-the-limit-blue = credit card limits; red = credit card balances).

      • Zard says:

        It still doesn’t bode well with the credit card usage rate is 25%. If I am doing that, I will have at least 20K debt. There is no way I can afford to pay that w/in a month. Are we American a bit over leverage w/ out spending?

        • Wolf Richter says:

          This is based on total balances, including those that are paid off monthly and never incur interest. For example, if you have a credit limit of $10,000 on your card and you spent $1,000 on your card in July (auto-pay of subscriptions, some restaurants, groceries, etc.) and then paid it off in August by due date, you have no interest expense. It’s just a payment device, instead of writing checks. But it will show that you used $1k of you 10k credit limit.

          So in the above chart, red line, these are total balances. The article explains what that actually means. It’s precisely why I wrote the article because there are all these misconceptions about credit card balances.

      • Dubronik says:

        So based on the numbers shown. Can we estimate that the balances carried forward subject to interest is about 430 billion approximately? And the balances incurring no interest are about $600 billion. Now if $600b are, let’s assume, getting kickbacks in different forms of let’s say… 2%, then we are talking $12b per month. Wow that is a lot of money/kickbacks. Now let’s look at the ones who carry balances…. If $430b x 20% / 12 = $7.16b per month of interest (estimated) the house still ahead by a bunch. I did not include the transaction fees charge at all businesses. Quiet interesting😃

      • Ltlftc says:

        We opened two new lines to take advantage of better cash back rewards. Pay in full monthly. Total spending the same.

        Chart makes sense.

    • RH says:

      I and other people I know have tried to pay down cards and reduce spending by cutting trips, restaurant lunches, etc., while spending on computers and other things which we will need in the future, whose prices will go up if inflation proceeds. At the interest rates credit card companies have charged, almost any debt is better.

      Some Burry watchers say he is cryptically predicting a recession and I do not know if that is in reference to what is happening in China or not. I wonder if the Wall Streeters got caught unprepared with billions in the current versions of “subprime” securities as in 2007-2008. There is an 60 minutes interview with the writer of the “Big Short” which is notable more for what he does not say but is implied, so watch it.

      It is amazing how the bankers took advantage of the Bush government aid, after running their companies into the ground, to my pay themselves huge bonuses– after they had made millions by the subprime sales, which they should have been able to see would end catastrophically for investors.

      • MM says:

        Computers only ever go down in price. If you wait till a new model comes out, you can usually buy last year’s model for a discount. Alternatively, simply build your own computer instead of buying one.

        • RH says:

          FYI: I agreed with your generally good advice years ago but times may be changing soon. The latest processors plus systems (if you bought power supplies a year ago, when they were much cheaper), are much, much more expensive while amazingly good deals are available if you buy CPUs and motherboards from two generations back. I upgrade older systems.

          You can still get 80% of the performance by paying 20 to 30% of the price — until the older stuff sells out on retail. I gifted older, “used up” systems (e.g., with SATA, SSD drives) to my kids/family long ago. They still run fine, which may be why we see the new OS has restrictions, e.g., as to a TPM 2.0 (which may even get enforced despite some work-arounds) and “suddenly,” all, mainstream, older CPUs have huge, ‘new” vulnerabilities ——- err, suddenly? LOL I am cynical.

          Just use slightly older computers offline for non-confidential tasks and install Linux Mint or a similar OS. Linux even plays games now if you select the right version and your kids want that. Cloning virtual operating systems, which you then delete regularly also (running atop Linux to avoid certain a company’s monitoring) will also frustrate hopeful hackers/data firms and make you feel like 007. LOL

          Do not throw the older computers away! A possible geopolitical event soon might stop the production of most, current chips and cut off necessary materials for their new, faster equivalents! Newer chips have subparts/tiles that cannot yet be made in the US.

          That is why I have four, newer, back up computers stored (some that I built or bought on sale from smaller, computer builders and can truly upgrade), in addition to three that I built or one that I heavily modified, for serious work now. Remember what happened and may happen again to GPU prices, even if AI investment deflates.

      • RH says:

        Rare earth shortage (artificial) plus geopolitical event(s) plus AI revolution plus increased electric car production plus increasing automation due to reshoring = rising GPU and computer prices for years.

  4. Gen Z says:

    I have a C$1,000 limit and I don’t want anymore credit cards!

    Walmart cashiers keep badgering me for their store credit card which carries at least 29.99% interest.

    Now Tim Horton’s has a credit card, and they promise to give tens of thousands of points if I apply for one…Hell no!

    I’m not incurring debt to eat C$3 bagels and C$2.49 coffees just to get 10 cents worth of points.

    • Einhal says:

      I don’t understand this mentality, I really don’t. No one forces anyone to buy coffee they can’t afford with it. I don’t go into debt when I use my credit card.

      • roddy6667 says:

        I have not paid a penney of interest on a credit in about 25 years, although I use them daily. The only person who makes you pay 29% interest is yourself. Pay the balance as soon as it get posted.

      • sufferinsucatash says:

        When I was coming up, I didn’t have much. Yeah my parents helped me a little but they had their own bills. I wanted to start a business so the first thing I applied for was Best Buy credit. Bought a laptop and laptop bag, it was even “order online and pickup in store!” . That went ok.
        But then I needed more to float the cycle of bills coming in and paying them off. They can be used as a tool. Heck the guy who made the movie Clerks, says he bankrolled the whole thing with credit cards.

    • Thomas Curtis says:

      I don’t like credit cards either.

      • The Real Tony says:

        Think of being in a lineup where everyone paid cash. The hired help today probably couldn’t even make change on the old cash registers from yesteryear.

        • Thomas Curtis says:

          Seems cash is faster especially when you are caught behind somebody having trouble with their card(s).

          Most of today’s cashier’s haven’t been taught to count money back but 95% could learn it quickly.

          I am not sure MGMT wants them understanding how to return the correct amount of change without the help of the machine……..

        • Ethan in Nova says:

          No way is cash faster than contactless payments.

        • sufferinsucatash says:

          Remember when fast food places went to those automatic cash and coin dispensers?

          They would literally spit out a few bills and your change in a second. Then those machines kind of disappeared fast.

      • El Katz says:

        Credit cards are only a negative if you revolve credit. The rest of the time, they’re a net positive. They can provide additional warranties, allow you to protest defective items/items not delivered, if it’s stolen you can cut it off with no harm to yourself, fraud protections…. Plus, it’s hard to get “jugged” as you can cut off the credit card minutes after it’s stolen but you can’t get your cash back.

        $1,000 limit? Good lord, no. As an example, I had to move some of my sister’s stuff from FL to TX. Looked into U-haul. Cost to rent the truck, hotel, food, and gas (not to mention time) was more than shipping via container. However, I needed to post a credit card with sufficient limit…. During that entire debacle (moving her and other incidentals like chairs and beds) I ran up $20k on a credit card… (hers was useless because she, like you, had a credit card phobia) and promptly paid it off… plus I got 2% cash back and paid no interest. Credit cards are a tool. You don’t refuse to buy a hammer because you might smack your thumb….. do you?

        • ru82 says:

          True…but in a round about way we do pay for all those extra features they offer.

          I know of a few tradesman and wholesalers of building products. The price they advertise is cash. If I want to pay with a credit card they will charge me 3% more.

          When you are at Walmart or Home Depot and the price is the same for cash or credit, the credit card is the way to go if you pay off the balance each month. The cost the retailer has to pay the credit card companies is baked into the price though.

        • Gen Z says:

          The journeymen who drive 2007 model Ford pickups don’t want to be paid in credit cards, etransfers or Paypal. They want cash. I’m guessing that credit cards are good for those who travel, or have higher incomes.

          A credit card is a trap in Canada. People get taken advantage of, and end up with revolving balances in the tens of thousands at 24 to 45% interest. Not me and that.

        • El Katz says:

          I always offer a local tradesman the option of cash (as in currency, not a check) or a credit card. Most snap up the cash and will discount the price… especially if there’s no need for a receipt.

      • MM says:

        Why not? If you use the points to pay down the balance and don’t accrue any interest, its like everything costs 1-2% less

    • BobE says:

      Dave Ramsey has his $15M mansion from writing books to help people get out of their credit card debt. Too many people need his books. To be fair, he has excellent advice to get out of debt once you are in it. IMHO, It is too tempting for many people to use the easy money on a credit card even if they can’t afford it. I’m sure they have an initial plan to get out but 30% interest can be devastating.

      I put everything possible on the Credit Card rather than pay cash (The 1-5% cash back is very nice). I pay them off every month but at times am shocked on what we spend. We readjust the next month. It is good feedback.
      I’d cut them if I started to hold 30% interest bearing balances. It is very easy to use the card. That is the danger.

      We only have 2 cards. Otherwise, it gets more difficult to manage.

      • kam says:

        My first wife had credit cards for everything. Always to the max. I paid them all off when the total passed $25,000 (30 years ago). I cut up all the cards except for a M/C and 1 Visa. 2 years later she accumulated more cards, more debt.
        Garage Sales every year where we got back 5 cents on the dollar for the crud she purchased the previous year.
        That, and many similar things, is why I have my second wife, whom I married 25 years ago.

      • sufferinsucatash says:

        Man I can’t stand Ramsey. Dunno what it is about him, his attitude or something. And somewhat I doubt he knows exactly what he is talking about as well.

        I’m a CH fan. If you need a “guru”

        • cb says:

          Ramsey is a bit jerky. Became an entertainment millionaire dispensing common sense.

          Wolf can be jerky, especially when he deletes my serious posts …..

          However, Wolf is a Genius, so he must be suffered ….

          Who is CH?

    • Gattopardo says:

      “C$3 bagels and C$2.49 coffees”

      How crap, stuff is cheap in Canada!!! Double that in So Cal.

      • Ram says:

        A bagel costs $1.60 and a coffee costs $1.95 in jacksonville florida. Not sure why you are so surprised

  5. AV8R says:

    12% on margin at Schwab now.

    Everyone is getting in on the act.

  6. Brooks says:

    Does this include balances are zero interest. I have 20k at zero because I’m making 4.25% in amex savings.

    Also a third of the population paying 30% interest is very concerning.

    • Wolf Richter says:

      #1 question: I’m not sure how the ABA tracks that. I assume that if it doesn’t accrue interest, it’s not included.

      #2 question: They’re not all paying 30%; Subprime cards are paying 30%. The average for all cards interest-accruing or not is around 20%, and many cards are in the 15% range.

      • Random50 says:

        I also suspect many of the people paying on 1 credit card are in fact paying on multiple credit cards. Plus it presumably includes those people who usually pay off in full but have some kind of personal admin screw up for the month. I know I pick up one of those every few years.

        • The Real Tony says:

          I use two credit cards in case upon the renewal data the letter coming from Canada Post is somehow opened and resealed. So I have one good credit card if I immediately cancel the other one.

  7. Tom H says:

    There is still a way to get small money at 3% if you can pay it off in 12 months, or 18 months depending on the specific promotion. I have a B of A card with a 23K limit and almost every week they send me an offer with credit “checks” I can use just like ordinary checks, though they add a 3% charge to the balance. I used one of these instruments in the recent past on an 18 month promo and it worked out quite well. Of course you had better be sure to pay it off by the term or they will stick it to you badly.

  8. jr says:

    I’ve had a credit card for more than 50 years and haven’t paid a cent of interest. Even so, when ever I have a large monthly balance my FICO score goes down. Often when I’m building a house I have the odd large credit card item. Pima County took a $15,000 credit card payment online for my building permit with no surcharge. My window dealer just took a CC for a $13,000 invoice. Each time this happens my credit score goes from like 820 to 795. I have zero debts and haven’t financed anything since 1999.

    • Flea says:

      Me too except my charges aren’t as big

    • Wisdom Seeker says:

      @JR – if you pay off those large cc bills before the bank generates the monthly statement, they won’t be in the balance reported to the credit bureaus, and your FICO (and other) credit card scores shouldn’t drop.

      The score hit is from having a monthly “statement balance” that’s a substantial fraction of your credit limit.

      I suppose you could ask for a higher limit but of course there’s a point beyond which that will negatively impact your score as well.

      • MussSyke says:

        I don’t believe that to be true. I never carry a balance, but have experienced the same phenomenon.

        A while back, my mortgage broker pointed out that your balance at the time of inquiry is what counts. He told me this is why my ~$3k balance now has to be counted as a $35 monthly debt payment against me.

        • MussSyke says:

          Sorry for the edit:

          I mean I tried paying them off before the statement and my broker said that was futile.

        • Wolf Richter says:

          Wisdom Seeker,

          you’re mistaken. We’ve been paying off our cards by due date for decades, and our balances appear in the credit reports just fine. I see them every time I look at our credit reports by the three major credit ratings agencies. In Feb 2020, I paid something like $15K for a rental car (hybrid) with a credit card (2% cash-back, LOL), which was paid off automatically next month, and that lump showed up just fine on the credit reports. It stuck out too because it was much larger than our normal stuff.

          As I pointed out in the article, credit bureaus do not break out and probably don’t know what are interest-accruing balances and balances that are not interest-accruing. Individual banks know that, but don’t seem to share this info.

        • Wisdom Seeker says:

          MussSyke and Wolf, I fear you both missed my point. I’m not talking about “paying the card in full every month to not carry a balance”. I’m talking about “paying large charges early, before the statement is generated, so that there is nothing even due on the monthly statement”. Perhaps I should have written: pay the charge manually within the billing cycle, don’t wait for a bill.

          Here’s a step-by-step explanation:

          Let’s assume your credit card billing cycle closes around the 10th of the month every month. (If yours is different, adjust dates below accordingly.)

          According to Experian, “Commonly, credit card issuers report cardholder activity at the end of every billing cycle.” (Source – google “Experian when do credit card payments get reported”)

          So what you might do is to buy a car (or whatever large purchase) using your credit card on, say, May 20, early in your billing cycle.

          You could then manually make a payment to the credit card company on May 25 or May 30 or whatever. But do it early, so the money hits your credit card before the billing cycle closes on June 10.

          With this method, you don’t wait for the June 10 statement to come to you. You don’t auto-pay “balance in full” in the usual way by June 30. You certainly don’t “carry a balance”! No, what you do is get that large payment in to the card issuer early, within the billing cycle, even before the credit card company generates your monthly bill.

          Because you have made a payment to offset the purchase within the billing cycle, your next monthly statement on June 10 will show no outstanding balance from that large purchase.

          Assuming your credit card issuer follows the herd and reports your latest monthly balance (zero!) to the credit bureaus on or soon after June 10, the credit bureau will see that zero balance.

          So even though you just bought a car, your credit score will likely not be dinged for having a large balance relative to your credit limit. Which is proper since you already paid the car off, and are using your credit card even more responsibly than the rest of us who wait for the monthly statements!

          If maxing your credit rating is particularly important, keep in mind that not every card issuer reports on the same schedule, so you might want to check when your particular card reports its data.

          There are potential drawbacks to paying early – you don’t get the extra month’s interest on that cash, and if a billing dispute breaks out you have more money tied up with the card issuer – but this is one benefit. Another benefit is that you can cycle more purchases on that card without needing to ask for a larger credit limit.

        • Brooks says:

          That’s not true. The balance on your credit report is the statement balance. Remember even if you pay in full each month your statement balance can still be high. If you’re about to buy a house pay it off before the statement date and your score will jump up.

      • Bs ini says:

        For sure on the current balance included in one’s fica score and bank loan applications. My daughter has an Amex card with her name but it’s linked to my Amex . My balance is usually 3k monthly and she does not use hers but basically my cc balance was included in her Mtg app . Because the card was issued in 2005 for her the longest good debt helped her fica . Took a little while for her and bank to figure out the details

      • The Real Tony says:

        I never use a high limit on a credit card in case its stolen or lost. I carry low limits knowing I can adjust the limit size. My brother-in-law carries a $500,000 limit on his credit cards because he’s a showoff.

      • Slickfish says:

        This is true. I have used this trick on occasion when I knew I was applying for a large loan and I had unusually high usage of my credit cards the month before. You make a manual payment BEFORE your cycle ends and whatever you paid is taken off the balance BEFORE the bill is generated. When you go to pay your bill, you will have a “remaining last statement balance” or something of that nature which will be any amount you did not pay off before the bill was generated, or anything you charged between the manual payment and when the bill was generated and THAT amount is what gets reported as your balance for that cycle a week or two later to the credit bureau’s. This keeps your reported “balance” low and will not result in a temporary reduction in your credit score if you had higher usage the prior month. Really makes no difference unless you have significantly higher spending on credit cards in that prior month. I was over double what I normally ran through my cards.

  9. Home toad says:

    Even a cave man like me was able to follow your article so easy.
    Seems if we want the economy to prosper, lock everyone in their house for a year and hand out trillions of dollars, and wallah, drunk sailors.
    But, their is a credit card, a very large one, still owed by all of us it seems.

    • kam says:

      Home Toad
      So true. DC and the Fed are the teenagers you gave your credit card to, and can’t get back.

  10. Ralph Hiesey says:

    You failed to mention the 3% that the bank makes on every purchase. So if a purchase is paid off in 30 days, I would say that sounds like about 36% per year interest– at $T4.9 transactions that’s $150B per year for the banks. $150B total on $T3.03.

    Not really too bad–if you happen to be the lender. Who pays for that? Of course, everyone who buys stuff–whether they choose to use a credit card or not. So besides 8% sales tax for the state, that’s 3% extra that everyone pays for the banks.

    • Wolf Richter says:

      This wasn’t about what’s fair, or who is paying for the kickbacks, but about what portion of consumers have interest-bearing credit card debt. One topic at a time.

      Also, the 3% (actually it varies) has been charged for decades, but before, the banks got ALL of it, and consumers paid all of it. Now, there being competition, the banks have to offer incentives, such as these kickbacks, so we’re getting some back. Don’t complain about the beneficial effects of competition.

      • Einhal says:

        Yes. Anyone who doesn’t receive 2% cash back isn’t trying. There are many cards that give 2% back and have no annual fee.

        • Cookdoggie says:

          We have a card that gives reward miles on an airline. Over decades we have steadfastly accumulated those miles and only use them for one thing: international business class. I’ve had 3 such flights this year using miles.

          There is nothing finer than a lie flat seat on a 10 hr flight. It’s a luxury I would never pay for but when it’s with miles it feels like a free gift. So the 2% cash back dribbles might be nice but I’ve really enjoyed all the revenge travel this year. To each their own.

        • Bs ini says:

          Can you provide cc and bank names for the 2 percent?

        • Wolf Richter says:

          Google it, LOL. Wells Fargo pops right up “unlimited 2% cash back” (one of my cards). And a bunch of others.

        • Random says:

          Sam’s Club Mastercard gives 5% cash back at ANY gas station, not just their own. (But their own station is usually 5¢ to 10¢ per gallon cheaper than the “street price,” even before the 5% back.) Interestingly, the Costco pumps don’t accept the Sam’s Mastercard.

      • Cassandro says:

        Credit costs by credit card companies and banks are included in the cost of goods and services we buy. We have gotten used to being dinged for the cost of credit being rolled up in the cost of things and services we buy. We also have to pay for credit defaults since the banks and credit card companies cover their costs. The biggest bleed to consumers is the interest costs for those who don’t pay their credit card balances in full timely and every month.

      • Ralph Hiesey says:

        Yes, Wolf, I realize that was a slightly different point of view from which you were writing from. But thought it’s important to mention–and closely related to the cost analysis from your post.

        Of course cash customers don’t get any benefit– Ideally, for real competition, THEY should be able to make a choice about whether they pay for the transaction cost–and not be required to also pay if they decide not to use the card– but it is my understanding that the agreements between banks and merchants prevent that option–at least I know that WAS in the contracts in the past. I think it pretty obvious that the “rewards” are just a means of getting customers to choose “credit” instead of “debit” so they get the greater transaction cost from the merchant. And to make customers require from the merchant that that their “rewards” card be honored. But this is not really fair, because the merchant is the one paying for those rewards–for which they need to charge everyone.

        Or perhaps has that been changed? Since at least some gas stations allow a discount for cash. If people complain about sales tax–they should be able to complain about the additional % they have no choice but to pay–essentially increasing sales tax by 3%. The banks deliberately did not want to give the end consumer the choice–and make it appear that using their credit card does not cost them anything.

        • VintageVNvet says:

          As one with excellent ”credit rating”,,, CASH buying when from any but the largest or most remote on web vendors, we have reaped TONs of discounts with Franklins, etc…
          Used to carry couple K$s, but not any longer due to age, etc.
          Now go to ATM after discussing CASH discounts.
          Works very well still,,,
          at least until oligarchy insists otherwise, eh.

        • 91B20 1stCav (AUS) says:

          Ralph – TANSTAAFL?

          may we all find a better day.

  11. Julie says:

    Really appreciate this research Wolf, thank you.

    Carrying a balance on CCs even for a short time is concerning and I wondered how many people are in this position. My millennial daughter and son-in-law are high earners and I was surprised that they carry a balance on their cards.

    • Wolf Richter says:

      When I was 30, I bought stuff I couldn’t pay cash for, but I knew I could pay off the credit card within a few months. That’s normal when you’re staring out and making good money but don’t have a pile of cash. That’s also when you learn to despite paying interest on credit cards.

      • Random says:

        I was the author of an annual medical reference book, back when people actually used ink-on-paper reference books. I made good money, but my publisher paid royalties only every 6 months. In the early years, I lived off credit cards, paying up to $1000/month in interest, then paying them all off when the royalty check came in. Each year my credit purchases declined as my previous check stretched further into the future. After a few years my semiannual checks fully paid my forthcoming expenses without having to resort to credit cards.

        Some people live on credit cards by necessity, not because they’re profligate or bad at financial planning. In my case, it was a temporary situation that resolved over time.

        • Wolf Richter says:

          Yes, there are lots of cases like this where big lumpsum payments arrive once or twice a year, and you gotta make it through the period in between. Until you have enough operating cash, credit will need to be used. Small companies dealing with these stretched-out payments are in the same predicament, which is why they have working-capital lines of credit (or maybe including credit cards!), which is what you used your credit card for.

  12. sufferinsucatash says:

    Neat article!

    I once was one of those poor souls on the credit card interest conveyor belt of pain.

    Finally overcame it. It’s a hard lesson.

    You can have a great paying job but if your bills are too high and credit cards are too high, then you’re stuck for years. With no good options.

    • Flea says:

      Seems to be an education problem in Amaris’s ,when I gre up it was a village to raise children ,now it’s you tube and gaming . But as my depression era grandmother taught me don’t buy what you can’t pay for ,. It’s been a two sided coin made me too conservative ,to speculate ,but also survived all the hard times .

      • The Real Tony says:

        My father used to tell me if you can’t afford to pay cash for something you can’t afford it.

        • Charlie says:

          I used to tell young folks, that if your outflow exceeds your inflow, your upkeep will be your downfall :)

  13. sufferinsucatash says:

    Curious additional question.

    Since a lot of people are awash in cash and stowing it for 5%.

    What is stopping someone from starting their own credit card company and tying cards to their cash? Maybe target diners or air travelers.

    Sounds like 33% of your cardholders would pay you 20+ percentage points of interest a month.

    And if your cash is sitting in a pool, it is only depleted when you as the card company pay your cardholders charges? How does that work?

    • Carlos says:

      The reason CC interest rates are so high is only partially due to profit. CCs are unsecured debt and thus have a high default rate with no ability to collect on collateral.

      Account holders who don’t pay back the CC company have their accounts written off, and the is debt sold to a collection agency for pennies on the dollar. So everyone who is paying only their minimum payments has to cover the potentially thousands of dollars of losses caused by the minority of deadbeats.

      A card with a 22% interest rate might yield the company an average 7-10% on capital (at best) due to this one factor.

      So to answer your question why everyone with some cash doesn’t do this is because of the financial infrastructure, technology, risk and fraud management, not to mention the regulatory burden, and on and on…

    • Wolf Richter says:

      There sure is lots of competition out there – about 4,000 banks are into it and 2,000 credit unions, and a bunch of other outfits, as you can tell from the junk-mail credit card offers you’re getting.

      • Flea says:

        Freeze your equinox transunion accounts and no more credit card offers . nice

        • Wolf Richter says:

          Yes, I’ve been recommending that for years. Freeze all three of them.

          But you still get credit card offers from companies you’re already doing business with, such as your banks and airlines where you have a frequent flyer account.

    • El Katz says:

      “What is stopping someone from starting their own credit card company and tying cards to their cash?”

      Crooks, thieves and scoundrels.

  14. Cassandro says:

    Credit card balances that are paid off one month later are effectively a one month borrowing, paid off with income generally earned in the following month. So a huge amount of purchases / credit card transactions are effectively a one month loan against the following month income. So what some may ask! But this means that credit cards have allowed people to go from a cash now when buying something to a cash next month when the bill arrives from the credit card company. So if a person loses his/her job or retires, there is a catch up problem if there is no cash earned/ received in the month following the charge.
    Kinda of like a hangover, not a problem generally, but a risk.

    • Wolf Richter says:

      Not the case in my house. Credit cards are strictly a payment method. Cash is in the bank and elsewhere. Lots of commenters here expressed the same.

      • perpetual perp says:

        I wonder how many people pay in cash in order to get 3% off whatever they bought, or whatever service they bought? I know my local auto repair business takes it off my bills. Also, what about ‘lines of credit’ used by businesses big and small? The data you sussed out is interesting, but the total credit out there is no doubt even larger by a significant amount. If the Fed keeps it up, the safe will be opened and we will get one heck of a recession.

        • Wolf Richter says:

          Handling cash is costly for big retailers and restaurants with employees. If the owner of your local repair shop takes the cash, it is one thing. But for a big retailer such as a chain store or a big restaurant, there are big costs involved in handling cash, from balancing cash drawers and account for it, to transporting the cash to the bank. And all along the way, cash has a tendency to evaporate, and then you need to investigate where, how, and who, and maybe fire people etc. Cash is a HUGE hassle for big companies with lots of employees. The costs of cash may well be higher than the percentage a big retailer pays in credit card fees (which is less than 3% on average).

        • rick m says:

          I’ve tried to get a cash discount on major automotive bills for the stuff I won’t do, like transmission rebuild and suspension, from smaller local shops. They’re not interested and see cash as a headache for their accountant and a potential IRS flag. One of my cards keeps trying to get me to change my cashback plus flavor to entertainment from gas, and they all are dispensing with the value added extra services like extended warranty coverage with card purchase. But they’re a good deal (refunding all or part of the merchant fee that’s built in to the price) for people who already have good credit and provide a path to improvement for those that don’t. And trying to live in modern society without a credit card or two is an absolute pain in the ass. I’ve not rented a car or gotten on a plane without a credit card since the seventies.
          Still need cash for additions to my coin collection, and many people don’t use cards for purchases they want to keep secret such as guns and ammunition.

        • The Real Tony says:

          Where I live all the Chinese run businesses ask for cash first before you pay. Prices are always negotiable and they give you at least 3 percent off if you pay cash. Most of the people pay cash real cash not credit cards.

        • Lin says:

          My dentist offers a 5% discount for paying by check. That beats the 2.5% cash back I get from my CC. I only use real cash at the farmers market. When I get home, I wonder what happened to the $80 I took with me. Using a CC makes it easy to track monthly spending.

        • TheAltonRoute says:

          We recently started adding 3.25% to all card purchases. The card fees were getting bigger every month. Most of our suppliers have started to charge 3-4% for payments with cards. I’ve noticed that many local restaurants are charging for card payments. The local car repairmen said that they anticipate who will pay with a card and figure that into the invoice without listing the fee separately. The points party is over.

      • Zard says:

        With 4.5Trillions balance, that mean about $12K/person in America.
        For a family, that can be easily $40K debt. Sure some of us can pay
        off monthly, but the reality of 40K/family will hit hard on many folks.

      • Imposter says:

        Great article, unfortunate that it takes so much research to flush out data that ought to be readily available. Thanks for your work!!

        Just guessing but I bet those banks that offer CC deals are all too aware that 28% or so are going to get wrapped up in the interest death spiral. They are “casting a wide net” so to speak.

        Yes, I’m yet another one of those, where CC is simlly a payment method that replaced checks years ago. Especially so since the on line purchasing has become such a major portion of spending.

        Although I still keep some cash for purchases at the local donut bakery!! CC spend is well within my income level so the two CCs we have are paid before interest. Just guessing here, but I’d say north of 98% of all spend flows through our CCs paid before interest.

    • El Katz says:

      “May I pay you tomorrow for a hamburger today.”

      • Sufferinsucatash says:

        Who knew there would be less Popeyes than Blutos and Wimpys in the advanced post war era?

  15. Will in Minneapolis says:

    “With only 64% of adult consumers having credit cards, and with only 43% of credit cards accruing interest, it pencils out that very roughly 28% of adults in the US have one or more credit cards with balances that accrue interest (43% of the 64% that have cards).”

    How much of a logical leap do you suspect this is Wolf? Are there data to indicate that the population of people paying their cards off every month vs the population of people revolving a balance – that these two groups have similar numbers of credit cards per individual? Or that people may have multiple cards but only revolve a balance on one of them and pay off the others or whatever? From personal experience, people I’ve known that would revolve balances years ago only did it on one or two of their cards despite having additional cards with which they didn’t…

    Another interesting question is what is the amount of the revolving balance vs just credit card transactions in total. I would also assume that individuals who revolve a balance generally have lower limits and spend less than individuals who pay it off every month (ie credit risk between these groups would be viewed differently)? – although this is just a guess obviously..

    As an aside, in a society that appears to me to be largely debt-driven, it is strange that it’s difficult to figure out how many people are in debt and by how much..

    • Wolf Richter says:

      #1. Not much of a leap, old-man shuffle maybe, LOL. 550 million credit card accounts spread over 166 million people (3.3 cards per cardholder on average), which covers the top three (Visa, MC, AX). Some have more cards, some have fewer cards, across the spectrum. Cards with interest-bearing balances also go across the spectrum, and have always included a lot of younger people with good credit and good income that are starting out equipping their home, going on expensive vacations, expensive dates, etc., which they can afford income-wise, but they don’t have the cash in their checking accounts, and don’t want to borrow from their 401k for the relatively short period it would take them to pay off the card balances. This is classic. I did it. Just about all my friends did it. Young people today do it. They carry hefty balances but because they have high incomes, they can pay off their cards in a fairly short amount of time, and they do. These people have high credit ratings because of their flawless payment record, and high credit balances (banks love them), and they get much lower interest rates than subprime customers… they may get 12% or 15% now, instead of 30% for subprime customers. And after a few years, as cash builds, they don’t borrow via their credit cards for the rest of their lives. The lowest subprime-rated consumers cannot even get a credit card. So they’re not in the 166 million cardholder universe. Then there are subprime-rated and near-subprime rated cardholders who are generally unable to borrow large sums, and who are charged 30%. So combine those with the hordes of younger people with good incomes and relatively high interest-accruing balances for shorter periods, and lower interest rates, and with super-prime-rated high-income cardholders that are able to borrow very large sums on their cards, with the lowest CC rates out there (including dentists that are staring out, etc.), and so it all averages out.

      #2. “Another interesting question is what is the amount of the revolving balance vs just credit card transactions in total.”

      Yes, interesting question, and it’s not reported. Each bank knows this for its own accounts, but apparently don’t report it to the credit bureaus. About every five years we see a report, such as by the Fed, that extrapolates that number from surveys of banks.

      #3, “I would also assume that individuals who revolve a balance generally have lower limits and spend less than individuals who pay it off every month (ie credit risk between these groups would be viewed differently)?”

      No, see above.

      #4-A. “As an aside, in a society that appears to me to be largely debt-driven…”

      This is a misconception. Every debt is someone else’s asset. John’s interest-bearing credit card debt is the bank’s income-producing asset, or often the income-producing asset of a pension fund that bought the Asset-Backed Securities (ABS) backed by credit card debt. There is no such thing as debt by itself. Someone always owns the asset. So you might as well say, “in a society that appears to me to be largely asset-driven.”

      #4-B.“…it is strange that it’s difficult to figure out how many people are in debt and by how much.”

      We know most of it. We know total interest-bearing consumer debts outside of credit cards because credit cards have this mix of being part actual debt and part cash flow from what is essentially an electronic check-writing method. So we know the balances of mortgage debt, HELOC debt, auto loans and leases, other revolving debt (such as personal loans), and student loans (though I don’t consider them loans until we see large-scale payments and interest-accruals, which we’re still not seeing) – and I report on it from time to time. We just don’t get the data on which part of credit card debt is interest-accruing debt, and which part is the cash-flow from what is essentially an electronic check-writing method.

      • John H. says:

        4-A “Every debt is someone else’s asset.”

        While this is certainly true, aren’t assets that are dependent on debt the bedrock of the “systemic risk” that macro-prudential regulators are trying to control (at least in the corporate/banking debt arena)?

        I recognize that the article is about credit-card debt… but it strikes me that they all tie together at some point.

  16. JeffD says:

    Is it clear if ATM cash withdrawals are counted as debt card transactions in these reports?

    • Wolf Richter says:

      If you use an ATM card (debit card), most common, they’re not credit, and they have nothing to do with credit cards. They’re debit cards that directly charge your checking account.

      If you use a credit card to withdraw money from an ATM, it’s included in the credit card balances.

      • JeffD says:

        I was wondering how much of the debt card money was people withdrawing ATM cash vs Point of Sale transactions. That would be interesting to know, if captured.

        • Wolf Richter says:

          Probably so little you can’t even see it with a magnifying glass because many banks treat that as a “cash advance” with interest accruing immediately, even if you pay it off by due date, and the interest rates are higher on cash advances, and they come with high fees. It’s expensive cash!

          There is also not a lot of need for “cash” these days — why not pay directly with a credit card, save the fees and interest, and collect your kickbacks?

      • Petunia says:

        Debit cards can accrue interest if they are attached to a checking account with an overdraft option. This can make an ATM withdrawal on a debit card an interest bearing event.

        • Wolf Richter says:

          A debit card is the plastic portion of your checking account, but it’s immediate and electronic: it directly links to your checking account, and it will never accrue interest. An ATM withdrawal with a debit card = cash withdrawal from your checking account.

          If you do not have overdraft protection, you cannot use an ATM to take cash out of your checking account that’s not in it. So if your checking account balance shows at the ATM as $100, that’s the maximum you can take out. But it can be that a check for $50 you wrote earlier is floating around and hits your account after you make the cash withdrawal, which then triggers the NSF (nonsufficient funds) fees, the bounced-check issues, etc. And to avoid this, you can get overdraft protection from your bank.

          If you have overdraft protection from your bank, it transfers the nonsufficient funds balance from your checking account (=debit card) to another account, such as your savings account, a credit card, or a personal line of credit that the overdraft protection will draw on if NSF. You cannot get overdraft protection without linking your checking account to another account. This is a deal you make with your bank.

          If the link is to a credit card, the overdraft balance shows up on the credit card and accrues interest on the credit card, which is captured by the credit card data. If the link is to a savings account, no interest is charged (though fees may apply). If the link is to another credit account, such as a personal line of credit, the balance and interest show up there.

          In no event of overdraft protection is there interest charged to your debit card/checking account, though fees may be charged (banks love fees). The interest, if any, is charged to the other credit account that the overdraft protection links to and where the NSF balance has been transferred to.

        • Petunia says:


          I no longer have overdraft and haven’t for years, but you are mistaken, the balance on the checking goes negative and the fees/interest are also shown as a negative balance until your next deposit is applied towards the negative balance. This was my experience as a customer and as a bank employee.

          Bank employees were not charged the fees and generally carried a negative balance between paychecks. This was one of the few perks of working for a bank, which most employees exploited, but not me. I did however have overdraft on personal accounts and went negative on occasion.

        • Wolf Richter says:

          OK, I just re-read your comment – “overdraft option” is what you said, not “overdraft protection.” You have just overdrawn you account, and your bank charges fees on that, and tolerates it at its discretion.

          Here’s what Chase says you should do if you have overdrawn your account:

          1. Stop spending from the negative bank account

          2. Speak to your bank (“Some banks may be willing to waive certain fees.”)

          3. Consider professional guidance

  17. dao says:

    $4.9 trillion run through credit cards with 3%+ in transaction fees equals at least $147 billion. Sure there are expenses and some of that is returned in “cash back” incentives, but still that means hundreds of dollars per person are skimmed off very year by the banks.

    Just another outrage in how our society is set up like a Mafia shakedown operation.

    But who has time to protest or complain when a hurricane is about to hit California and Trump is about to be arraigned again?

    CBDCs incoming in 3..2…1….

    • JD says:

      Such a boomer comment. If you don’t like banks “skimming” a few %, then don’t use them. No one is forcing you to use their services.

    • El Katz says:


      You’re paying for a service/convenience. No one is “skimming” anything as they are providing something in exchange for the payment. Don’t like to pay the vig? Don’t use the card. Problem solved.

  18. John H. says:

    Very informative article! Love the way you describe the component details that make up what others report as broad fact headlines.

    If credit card debt is a component of household debt, and household debt is a component of total systemic debt, wouldn’t it be interesting to readers to do a report on the growth of “systemic U.S. debt?”

    I suppose the general components of debt would include:
    Government (Federal, state, local)
    Household (mortgage; student loan, revolving)
    (I might be missing some)

    For those of us who remain critical of the banking system (from Fed to fractional reserve banks), a forensic examination of the growth of debt in America (especially since WWII) would be mighty interesting.

    Apologies for the repetition of this request.

    • Petunia says:

      My parents lived through the depression era, didn’t have a bank account until social security made it necessary, never had a credit card. They would often use debt at local merchants to buy furniture, electronics, clothes, groceries, etc. The use of debt has always been there, it just shifted from local lenders to big corporate lenders.

      • John H. says:

        Petunia -“The use of debt has always been there, it just shifted from local lenders to big corporate lenders.”

        Good point: debt’s form has shifted over the decades. Creditor sourcing has evolved. Your parents installment loans, credit cards, payday lending, auto loans, TIPS, and student loans are all examples of evolution of debt.

        It’s not the “use” of debt I’m questioning. It’s the ever-growing variety, and the consistently expanding magnitude.

        If SoCal Beach Dude’s $100 Trillion total US debt number (post below) is correct, then that’s about 4x GDP. It was nowhere near that number in the 1930’s, and I believe has roughly tripled as a percent of GDP since 1980.

        How is it that a 250% increase in debt/GDP over 50 years is even possible, and why is it not a burning issue for the financial press, the voting public, and the stock/bond markets?

        Worthy of deep exploration and publicity, IMHO.

        • Petunia says:

          John H,

          The explosion of debt has accelerated since the GFC. It is a by product of financial repression. When you take interest rates to zero, all pricing models collapse, and prices rise to account for the risk of not knowing what anything is worth.

          I live in a middle class neighborhood where houses can/did sell from $500K to $1.3M. Every boomer in America knows these prices are insane, but there was no rational valuation model to express real price discovery. With rising rates the house prices will drop until the interest rate make the prices reasonable to middle class buyers with middle class incomes.

          Watch that increase in debt implode as interest rates rise.

          BTW, I can live in this neighborhood, as a renter, because the rents are closer to real valuation because of local wage constraints. My rental payment would value the house at half the “market” value. They could never rent at the full “market” value implied rent.

      • John H. says:

        Oops: should have said 200%…

      • El Katz says:

        There were such things as “charge plates” that were issued by Sears. That was the first form of credit my parents had. I think they got their first MasterCard somewhere around 1970ish.

        I still remember my Mom keeping cash in envelopes in her dresser drawer. There were individual envelopes for groceries, church contributions, water (city owned – paid at city hall), etc., That was how they budgeted their money. Since most commerce was local, it wasn’t a big deal.

        Back in the 1930’s, my spousal unit’s grandmother owned a corner store (groceries and sundries). She extended credit to neighbors as a convenience. It is also what took her business down when people could no longer pay when the Depression hit.

  19. Micheal Engel says:

    1) Transfer payments pale in comparison to the earning power of blue
    collar workers. Blue collar jobs are back. The gov paid to make love since LBJ.
    2) UPS workers earn more money under a new contract. A digger got
    a raise from $22/h to $38/h. Factory workers might earn $80K/y working hard day and night.
    3) U don’t need an “A” student to dig holes in the ground, push packages from point A to B, work in a factory, or drive a truck. Tech schools are good enough for the crumb people.
    4) There are 17,000 small towns under 25K population, out of 20,000
    total, all under C/S radar top twenty.
    5) Blue collar workers pay deflated rent, deposit money in small banks, buy a house, feed a family with money they earn, after working hard, gaining their self respect.
    6) They open new credit card accounts, pay the small regional banks, pay taxes and mortgages, instead of life under transfer money.

  20. ApartmentInvestor says:

    I’m a hands on Apartment Investor that has been reading this site off and on for a while and recently have been coming here more often due to Wolf’s writing “and” the great (not as crazy as Zero Hedge) comments. I don’t want my first comment to be critical but the “only” 64% of Americans “have” credit cards seems WAY low to me (especially in 2023 with most of people the born before 1930 that really lived through the depression dead). I also think the percentage of Americans with a balance is low (but not as low), I started working as a part time property manager as an undergrad in 80’s and I would have believed the 64% back then when many old people and poor people didn’t have credit cards. In the last ten years I have not seen (or even heard of) a single US citizen (with the exception of the small number of people with no willpower that follow Dave Ramsey’s advice and “cut up all their cards”) that don’t have a credit card. As an apartment manager I see (or at least hear about) hundreds of actual credit reports and in the 20 years I did commercial (mostly apartment) lending I saw the credit reports of everyone signing to guarantee the non-recourse carve outs and can’t think of one (even WWII vets) that did not have a single credit card. I grew up poor with penny pinching parents (who ignored all CA child labor laws and forced me to start working when I was young) that taught me about real estate investing when my grandmother had a stroke and came to live with us and we needed to rent her house (they didn’t get credit reports back then and even if they did I would not remember if the people that rented grandma’s house in 1970 had a credit card). Every member of my family has credit cards but not one of us has ever paid a penny in credit card interest (or bought a lottery ticket) and we get thousands in cash back every month (I have a Chase Amazon VISA that gets 5% on all Amazon purchases and a Fidelity VISA that gets 2% back on everything with no restrictions with both set to autopay in full every month). P.S. To jr you will always take a credit score hit when your “percentage of credit used” number moves by a large amount. When I was younger and renovating apartments I would often buy new appliances for three kitchens on a credit card with a $10K limit and have my “available credit” number go from 90% to 20% pushing my “credit score” down when I was in the middle of refinancing another property. Today I have a total “credit card” limit of over $100K and a HELOC of $1mm so an $8K charge does not really chance my “percentage of credit used” (or credit score) much…

    • Wolf Richter says:

      ” “only” 64% of Americans “have” credit cards seems WAY low to me…”

      It doesn’t matter what it “seems” to you. This is data from the credit bureaus that track every single consumer credit account out there. There are 166 million people with credit cards. Period. So now you can do the math: divide “166 million people with credit cards” by the “population 18+ years old” and you get 64%.

      That’s precisely why I used hard data, and not surveys, “seems,” and impressions.

      • Citizen AllenM says:

        I fully agree with Wolf. There are a tremendous amount of people that have crappy credit and no cards because they blew them up when they were younger. Or have never qualified for a card due to poor work records, or no legal status. As for paying interest, your family is the exception, not the rule. We also have a bifurcated economy with the working poor not having credit cards, but only debit or payday cards. Yes some employers load the net pay onto a debit card if you don’t have direct deposit.

        In short, credit cards have devolved into super direct checks instead of paper checks for everyone who just makes the full payoff. But that credit function is available and can be used.

        Someday this war’s gonna end…

      • Harry Houndstoothh says:

        Wolf Richter-

        And we certainly appreciate it.

        The amount of misinformation on this subject is astounding.

        Pure wisdom dispensed daily here.

  21. Mike says:

    Does this account for the various buy-now, pay-later schemes that have ballooned in the past decade? While it is credit, my guess is that this doesn’t show up with visa, Mastercard, or bank data?

    • Wolf Richter says:

      This is for credit cards only.

      Bay Now Pay Later (BNPL) is NOT interest accruing. The merchant subsidizes it, and it’s free for the customers, assuming they stick to the payment plan. BNPL spending is small compared to credit card spending. BNPL has nothing to do with credit cards.

      BNPL falls into another major category of unsecured revolving debt that includes personal lines of credit, etc., which is tracked separately from credit cards (green line):

      • Simple Simon says:

        With PayPal you can use a BNPL plan that gets charged to your credit card over a period of weeks or months and get the use of the money free from both PayPal and the credit card.

        For example you buy something the first day of your new credit card cycle via PayPal and pay 25% of the amount.

        Then every two weeks you pay another 25% and that is again billed to your card.

        Depending on your interest free period and the timing of the credit card charges by PayPal you could make the final actual payment three months after you bought the item.

        We’ve done it numerous times.

        So yes, BNPL can be a credit card charge.

        • Wolf Richter says:

          If you use your credit card to make the payments on a BNPL purchase, you engage in a two-step:

          1. the merchant subsidizes the initial payments, and you pay no interest. That’s the interest-free BNPL

          2. when the payments come due, instead of paying them, you borrow them from your credit card and pay interest on them. That’s your credit card, not BNPL.

        • BNPL GURU says:

          No Wolf you are wrong.

          In this process there is zero interest paid during the entire process.

          The item shows up on your credit card as a purchase like any other merchandise item being purchased and not a cash advance.

  22. Debt-Free-Bubba says:

    Howdy Folks. YEP, the Banksters sure know how to fleece folks. Just be smart and do not get into too much debt. Banksters charge Merchants quite a bit for CC service. In country ville, lots of merchants discount the sale by paying in cash. Cash is King once again, saving some of what you earn should have always been rewarded…..ZIRP, rest in peace??? Lets hope so……..

  23. SoCalBeachDude says:

    Most spendthrift Americans living way above their means are not abusing credit cards with high interest rates, but rather are now abusing home equity loans once again as housing prices have soared and now have more than $9 trillion in debt outstanding under these credit lines on houses that are vastly overvalued in the current US markets.

    • Wolf Richter says:

      HELOCs, LOL… (been getting confused by clickbait headlines again?)

      • Pilot Doc says:

        Yep. Our 250k heloc expires next month. Had a 3 year fixed rate of 3.75% on 2 paid off rentals. Ran so much through it over that time as it was free money compared to the rents it would produce. Now it will probably be closer to 8% and we don’t plan on renewing it (no need), but boy it was super convenient…power of OPM!

    • MM says:

      Who would want to take out a heloc at these interest rates??

  24. SoCalBeachDude says:

    Total outstanding debt in the US now exceeds $100 trillion with only about 33% of it being federal government debt.

    • John H. says:


      I’m not disputing your $100Trillion number, but I would like to know your source, the point in time it represents, and to get a sense of the historical fluctuations, if you’d be so kind…

  25. SoCalBeachDude says:

    If you are going to make a large purchase on a credit cards it is best to advise your credit card issuer in advance to expect a $5,000 or so car repair or other charge or things like a $15,000+ car purchase so that these charges go through smoothly and are not flagged as suspicious at the point of purchase when you use the credit card.

  26. NoBadCake says:

    Does a chart exist that shows *interest-accruing* credit card balances over time?

    From this article:
    “Only about 28% of adult consumers (18 years old and over) have one or more cards with interest-accruing balances.

    The data from the Federal Reserve and others that report credit card balances don’t split out interest-accruing credit-card balances from balances that are paid off in full on due date and never accrue interest.”

  27. The Liberty Advocate says:

    Great article!

  28. SayNoToThe NWO says:

    any 0% offer I have ever received ( I get them almost monthly ) IS NOT 0% as the offers usually charge an approximate 3% fee on the amount you take. Not sure why so many consider this a 0% offer ?

  29. Bobber says:

    I would have guessed only 5% of adults pay credit card interest.

  30. Micheal Engel says:

    1) Noninterest bearing deposits are down $1T from $5.5T to $4.5T.
    2) The banks lend less, cut cost , but their profit margin is the second
    3) Most Wolf readers pay in full, but others leave a small balance to feed the bankers.
    4) Millennial with good income, piled up mortgages, car loans,
    student loans…who can’t stop spending, keep the banks happy.
    5) C/C delinquencies are low, because the banks are more conservative.
    Bad payers either entered the recycle bin, or became zombie, paying low rates for 60/72 months.
    6) Small business owners and big spenders are flooded with teaser rate, paying 5% for processing their loans.
    7) The CPI is down for COLA.

  31. Rico says:

    American Express has had 5 straight quarters of record revenue. They said travel and entertainment remained strong.

    Credit and debt is the engine of the US economy. The punch bowl.

  32. Nick Kelly says:

    Bit surprised to see checks in the mix. Thought they hardly used anymore except for large buys

    • Petunia says:

      I just ordered some checks, a minimum order of 80 was $42. Maybe this is why they are not used as much. Over 50 cents per check is a lot.

      • MM says:

        They’re also simply less convenient than a debit card, which is essentilly the same thing (vs credit).

        That said, I still cut checks to my city for prop tax, sewer bill etc because they charge a ridiculous fee to pay online (something like 3%).

      • Corey says:

        Nothing stops you from printing your own checks. Yes, really.

      • SoCalBeachDude says:

        Some banks such as JPMC (Chase) and WFB (Wells Fargo) do provide courtesy checks.

      • Lin says:

        Don’t order checks through your bank. You can get 240 checks for roughly $20 through

  33. Mike says:

    Credit card payments are (approx.) 1% of the total balance. Regardless of interest rate increases the 1 % is static. However, when interest rates were lower the payment increased slightly. I was talking with a Canadian and she told me every few years her 30 yr mortgage interest rate is ‘revisited’ and readjusted. She explained that she was worried because if her payment increases she may not be able to afford her house. Canadian banks are now leaving the payment static and extended the loans out to up to 90 years. It would appear they are using the CC payment model for mortgages.

    • eg says:

      We don’t have 30 year mortgages in Canada. A typical fixed rate mortgage here is 5 years, though you can get one as long as 7 and as short as one year. Many Canadians have floating rate mortgages.

      The upshot of which is that Canada is probably more immediately impacted by interest rate increases than the US.

      • Mike says:

        My understanding is Canada does not offer a FIXED RATE 30 year mortgage. Do financial services other than banks offer it and is this why, as the Canadian female explained and as I wrote above, the rates are reset every few years to the going rates at that time?

        • eg says:

          I am not familiar with what non-bank firms might be able to offer in terms of mortgages that banks can’t, but my suspicion is that the Canadian female in question likely confused “term” with “amortization period.”

  34. JimBob says:

    Other than to get cash for my favorite bar every once in a while (they only take cash), I can’t tell you the last time I used my cash station for a purchase. We use our SWA card to pay for everything when shopping. The card finances our AZ to Chi round trips. We pay off the balance every month, and also keep track of what we are spending our money on.

    Not sure what they get from the deal.

    • Z33 says:

      They make a lot of money off transaction fees. Their only source of income is not interest on unpaid balances. Hence, you can see some stores that charge less for paying in cash than credit (i.e. some gas stations).

  35. shangtr0n says:

    Understanding that this was intended just as a rough estimate, and it’s a very helpful one, I wouldn’t be surprised if the actual number is even lower than 28% because my hunch is that, on average, those who carry balances likely have a higher number of revolving accounts than do those who do not.

  36. fred flintstone says:

    Up up up up go the rates……….Wolf was spot on.
    Going to be interesting as to when this train stops……considering all the reasons cpi will go up up up in the fall.
    Finally….. an easy time to invest……just sit around and collect 5 plus until it peaks.
    Pilots just got a big raise, 41% over 4 years……about 10% per year……. oil up………I wonder if that means airline prices go higher. Finally going to be seats available on most flights.
    Quite a few student loans now forgiven.
    Yep!….the feds got this under control…..sort of like the fire department fighting the 911 fire.
    I visited a home builder just to see what is available…..for the same sq ft I’d pay 27% more than 3 years ago.
    Thank goodness the fed is on the job!

  37. phillip jeffreys says:

    Guess we’ll see soon enough where this is really headed.

    Covid stimmy was huge.

    Savings rate zoomed late 2019-2020 then declined precipitously to current lows not seen since pre-2010.

    Future versus present. Wonder what folks are nervous about.

  38. bored ape says:

    Have Americans learned the wise use of credit cards at long last?

  39. longstreet says:

    As to the health of the consumer…

    rates of severe delinquency
    for auto loans are the highest
    since at least 2006, but the
    jobs market is strong.”

    WSJ 8/22/2023

    • Wolf Richter says:

      Context-less BS.

      Nearly all delinquencies are subprime auto loans. But only about 15% of all auto-loan and lease balances are subprime, so total subprime loans are a small $ number ($230 billion or so). And they’re nearly exclusively used vehicles.

      Two specialized subprime auto-dealer chains, owned by PE firms, shut down earlier this year because they had trouble selling their subprime-auto-loan backed structured bonds (ABS), as rates were hiked.

      When these dealer chains shut down, a lot of borrowers apparently stopped making payments to the surviving finance arms, and that has increased the distress on those bonds. These two companies are leaving behind a mess. And just looking at the default rates of those specific ABS, it seems these two companies’ customers are choosing to default in larger percentages. Some of them reportedly don’t even know anymore where to send their payments to.

      Subprime customers often get ripped off with way-above-market prices and huge interest rates that essentially doom those loans, and borrowers know it. At some point they stop making their payments and drive for free for a month or two or longer, and then the car gets repoed and they start all over again. If those deals were done right, the lender makes a huge profit on the sale and a huge amount of interest for a while then either takes a small loss or no loss when the car is repoed. It’s a very profitable business. But subprime dealers can get too aggressive, and when their own funding dries up, it’s over for them, and they just shut down. But the PE firms that owned those subprime dealer chains still made a lot of money on them. The bond holders are now taking the losses.

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