Industry Study
2026 Consumer Credit Card Industry Study
Summary:
Credit cards are the most common credit product in the U.S., held by 68% of Americans, with total balances hitting a record $1.277 trillion in Q4 2025. Average APRs remain near historic highs at 20.97%, and delinquency rates have climbed to 2.94% — well above the pandemic-era low of 2.12%.
Over the course of a generation, credit cards have become America’s most popular payment method. 68% of American consumers has at least one active card (source). We spend trillions of dollars and take on billions of dollars of debt a year using hundreds of millions of credit cards.
This industry study takes a deep dive into the credit card landscape and its effect on consumers’ personal finances.
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Key credit card statistics and takeaways
- Revolving credit debt dropped by $132 billion from February 2020 to January 2021 — the largest annual drop in 20 years. Since then it has rebounded sharply, reaching $1.33 trillion by Q4 2025.
- Credit cards (including retail revolving credit) are the most popular form of credit. They account for two-thirds of all loan products.
- Two out of every three credit card accounts carry a balance and pay interest on their credit card debt.
- Americans paid off $73 billion in credit card debt in 2020.
- Delinquency rates among credit card users dropped to a pandemic-era low of 2.12% in Q4 2020, but have since climbed to 2.94% as of Q4 2025, per the Federal Reserve.
- Debit cards remain the most popular payment method, but only among households with incomes below $100K.
- Consolidating credit card debt is the top reason borrowers qualify for a loan.
- Couples with children are the most likely to carry a credit card balance, but couples without children have the largest debt amounts.
- Hispanic and African American consumers are more likely to carry a balance on their credit cards, but White cardholders are the biggest borrowers.
- Rewards are the most attractive feature for consumers shopping for credit cards.
Credit card balance
For the first time in eight years, credit card debt (and revolving credit as a whole) dropped in 2020. Revolving credit includes credit cards and secured revolving accounts, such as home equity lines of credit. Since the Federal Reserve began tracking the trend it has increased almost one-hundred-fold. In 2019, credit card debt grew by over $92 billion. That’s the biggest credit card debt growth in a single year since the Great Recession and the fifth largest in over 30 years.
Revolving credit peaked at $1.097 trillion in February 2020 before the pandemic drove it down 10% to $965 billion by January 2021, as consumers used stimulus money to pay off debt and cut spending (source). That pandemic-era record has since been surpassed — revolving credit stood at approximately $1.33 trillion as of Q4 2025, per the Federal Reserve’s G.19 release.
Monthly credit card spending increased toward the end of 2020, but purchase volumes were still well below pre-pandemic levels. Credit card debt as a share of disposable income also fell to a near all-time low during this period.
68% of Americans have at least one credit card
68% of Americans have at least one active credit card and 52% are interested in a new credit account, according to a 2024 study by PYMNTS, making it the most common credit product. This trend is nothing new. Credit card usage has been growing since 2010, with a brief pause during COVID.
Americans pay interest on two out of every three credit card accounts
According to a 2019 study by the Consumer Finance Protection Bureau, two-thirds of active credit cards have a revolving balance. The same report shows that once a consumer carries a credit card debt balance, they are much more likely to do so continuously — prime borrowers for an average of 9 months, subprime borrowers for an average of 13 months. Roughly 12–20% of consumers (depending on credit score) take 2 years or more to repay the balance (source).
Some analysts view this appetite for debt as a financial bubble: a harbinger of the next recession.
Others feel there are good reasons for optimism. Credit card debt is at record levels, but the gross domestic product and unemployment rate remain relatively low. You could make the case that the growth of revolving credit debt — although not great news for the individuals carrying the debt — is indicative of a healthy economy. So what is the future for credit cards, and what does it say about the economy as a whole? This report will take an in-depth look at the current state of the consumer credit market so you can make your own mind.
Total credit card debt dropped by $73 billion in 2020
Total credit card debt grew by $267 billion from 2011 to its peak of $829 billion in 2019. However, it dropped 9.7% in 2020 to $756 billion. By Q4 2025, total credit card balances had recovered and hit a new record of $1.277 trillion, according to the Federal Reserve Bank of New York.
Debit cards are the most popular method of payment (by far)
According to a 2017 study by TSYS, debit cards were twice as popular as credit cards (54% vs. 26%). This is a recent trend. In 2016 credit cards surpassed debit cards as the most preferred method of payment. In 2017 debit cards regained their position as the overall most-popular payment method. Debit cards are preferred for small everyday purchases, while credit cards remain more popular for larger purchases.
Consumers with incomes higher than $100k prefer credit cards
Debit cards are the most popular form of payment for consumers. However, the tide switches with high-income consumers. Consumers with an annual income of more than $100,000 preferred credit cards over debit cards.
Credit cards are the most popular source of credit
Credit cards were the most sought-after type of credit, according to a 2018 report by the Federal Reserve that looked at the types of credit respondents applied for in the last 12 months.
The average credit card balance is now $6,735
Based on data from 2020, the Federal Reserve and the Census Bureau indicated that American households had an average of $6,384 in credit card debt. Experian’s 2020 State of Credit report showed a similar average balance of $6,470 per person for conventional credit cards and store cards combined. Experian’s most recent data shows that figure has risen to $6,735 as of June 2025.
Credit card balances dropped faster than credit limits
Consumers seem to be getting smarter about how they use their credit cards. Credit card spending is rising while credit card debt drops. This would indicate that more credit card users pay with credit cards for the rewards and protections but repay their balances before incurring interest.
Lower credit limits no doubt played a role. Still, the year-over-year drop of credit card balances ($930 billion to $820 billion) was four times larger than the contraction of credit limits ($3.9 trillion to $3.84 trillion).
The average credit card limit increased to $22,589
In 2020, the average credit card balance dropped by $713. However, the average credit card limit increased from $20,265 to $22,589. Aggregate credit card limits have continued rising since — the Federal Reserve Bank of New York reported limits grew by $94 billion in Q3 2025 alone.
New Jersey is the state with the most credit cards per household
Alaska has the highest average credit card debt
Alaska outpaces the rest of the country, with consumers carrying an average balance of $6,617 on credit cards alone (retail cards not included). In contrast, Iowa residents carry $4,289 on average in credit card debt.
Credit card APRs surged to historic highs and are now declining
Credit card interest rates reached 16.98% in 2019 (source) before dropping during the pandemic. Rates then surged as the Fed raised rates, peaking at 21.47% across all accounts in Q4 2024, per the Federal Reserve G.19 release. Following three Fed rate cuts in late 2024 and another three in late 2025, the average APR has since declined to 20.97% across all accounts and 22.30% for accounts assessed interest as of Q4 2025. That said, interest rates can vary wildly depending on which type of credit card you have. Store cards, for example, are not included in the data used for this average, and they charge some of the highest interest rates.
Many credit card issuers offer promotions to appeal to new customers. For instance, customers can get a 0% APR promotion on new purchases, balance transfers, or both.
However, consumers should be wary of the fine print. There are two types of 0% APR promotions:
- Pure 0% APR: With this promotion, you’ll get a period of no interest, after which the interest rate increases. If you have a remaining balance, interest is assessed on the amount that remains from the original purchase or balance transfer. This type is more common with major credit cards that offer balance transfer promotions.
- Deferred interest: Store cards that offer 0% APR financing often offer this kind of promotion. While there’s a period of no interest, there’s also a set interest rate the card charges if you don’t pay off the purchase in time. The catch with deferred interest promotions is that if you fail to pay the entire balance by the due date you’ll be on the hook for the interest on the original purchase amount.
The credit card market is bigger than ever
The credit card market is one of the largest consumer financial markets in the United States, and it continues to grow. Total credit card balances hit a new all-time record of $1.277 trillion in Q4 2025, up 38% from the pre-pandemic record of $927 billion set in Q4 2019, according to the Federal Reserve Bank of New York.
Credit card debt growth is in lockstep with GDP
Some experts consider this trend a warning of things to come, considering the number hit $1.02 trillion in June 2008 as the financial crisis took hold. As America tightened its belt, total outstanding debt reached as low as $832.5 billion in April 2011 but has continued a steady rise since then.
However, today’s credit card debt total is about 5% of the nation’s gross domestic product (GDP). In 2008, that number was 6.5%, thus imposing a greater threat to the economy.
Credit card debt is typically a concerning sign for the financial health of consumers. However, it’s not always bad news for the economy as a whole. Total debt in absolute numbers typically grows with the economy, inflation, and population growth. Credit scores remain relatively high, though delinquency rates have risen from pandemic-era lows. So the picture is more mixed than the headline debt figure alone suggests.
A source of debt that is still growing is tax debt. Read this report for the latest statistics and insights in the tax debt relief industry.
Delinquency rates have risen sharply from pandemic lows
Delinquency rates on credit cards fell to a historic low of 2.12% in Q4 2020, driven by stimulus payments and reduced spending. They have since recovered and climbed well past pre-pandemic levels. As of Q4 2025, the delinquency rate on credit card loans at all commercial banks stood at 2.94%, per the Federal Reserve — significantly above the pandemic-era low and at levels not seen since before 2020. One contributing factor to the earlier drop was that credit card issuers increased eligibility requirements and reduced credit limits; the subsequent rise reflects a normalization of lending standards and lingering inflation pressures on household budgets.
Credit cards are not as profitable as they once were
Credit card banks have seen a drop in their non-interest income — i.e., fees — and are now required to set aside more provisions for loan losses. This has caused a drop in profitability for major credit card issuers. The average return on assets for major credit card banks was 4% in 2019. At the same time, the CFPB’s 2025 Consumer Credit Card Market Report found that consumers were assessed $160 billion in interest charges in 2024, up sharply from $105 billion in 2022, driven by higher APRs and rising balances.
Consolidating credit card debt is the top reason borrowers qualify for a loan
SuperMoney generates tens of thousands of personal loan applications per month. The most popular loan reason among borrowers who get a pre-approved loan offer is debt consolidation. Credit card debt consolidation specifically makes up the large majority of debt consolidation loan applications.
Read this in-depth report of the consumer lending industry for the latest statistics and insights on the personal loans market.
A brief history of credit cards
The concept of consumer credit is not a new one. Scholars believe that the first consumer loans were issued in 3,500 B.C. in Sumer. As Dr. Stephen Bertman explains in Handbook to Life in Ancient Mesopotamia, they even had their own “credit cards.” Except they were cylinder seals and were worn around the neck. The cylinder seals served as a personal guarantee during business deals. If a Sumerian lost his cylinder seal, he would record the date and time with an official to prove that transactions made with it after the loss were not valid.
But credit cards didn’t come along until the 1920s when department stores and oil companies began offering metal charge plates to their customers to allow them to charge their purchases instead of paying for them upfront.
The modern credit card
In 1950, Frank McNamara took the next step toward the modern credit card when he started Diners Club. With his new company, he introduced the first credit card accepted by more than one merchant.
In 1958, well-known companies joined the fray, including American Express, Bank of America, and Carte Blanche. Bank of America marketed its competitor card, BankAmericard, in a publicity stunt called “The Fresno Drop,” where it mailed 60,000 activated credit cards to its Fresno, California-based customers.
The result, as you can imagine, was a flurry of fraudulent transactions and delinquencies. But the bank and its competitors learned from that mistake and continued to develop the industry.
Over the ensuing decades, the credit card industry made leaps and bounds. BankAmericard spun off of Bank of America and became Visa in the 1960s. Around that same time, a group of California-based banks started the Interbank Card Association, which later became Mastercard.
In 1986, Sears introduced the first Discover card, which became the first rewards credit card by offering cardholders a small rebate on purchases. Consumers and the competition caught on, and, as we now know, the industry exploded.
Now, several credit cards offer several hundreds of dollars to consumers to entice them to apply. Most recently, the Chase Sapphire Reserve launched in late 2016, offering an impressive $1,500 worth of rewards to new cardholders as a sign-up bonus, setting a new standard. These incentive programs have catapulted credit cards into the most popular form of payment and credit.
The demographics of credit card debt
Let’s provide some context to these household averages by breaking down credit card debt and usage into more meaningful categories.
Families are now more likely to carry a balance on their credit cards, but the amounts are smaller
The percentage of families carrying a balance on their credit cards came down significantly during and after the financial crisis. This is likely due to high rates of default, a reduction in the supply of credit, and a general sense of caution towards credit products that occurred in this period. However, in recent years we’ve seen that trend start to shoot back up.
The story here is nuanced. The percentage of families that carry credit card debt grew from a minimum of 38% in 2013 to 44% in 2016, but the median value of credit card debt dropped. It seems that more families are carrying a balance on their cards but for smaller amounts.
Couples with children are the most likely to carry a balance, but couples without children are the biggest borrowers
Not surprisingly, couples with children are the most likely to carry a balance on their credit cards. However, the median value of their credit card debt is nearly the same as couples without children.
College graduates have the largest credit card debts
Household heads with some college education are the most likely to carry a balance, but those with a college degree owe nearly twice as much credit card debt. A similar pattern appears when you look at the occupation of the family head.
Consumers working technical, sales, and service jobs are more likely to carry a balance, but managers and professionals owe $1.5k more
Families with a household head in a managerial profession are less likely to carry a credit card balance. But the balances they carry tend to be almost twice as high as households with a family head who works in a technical, sales, or service occupation.
Wealthier consumers are less likely to carry a balance, but when they do, the amounts are much larger
Income seems to be a driving force behind this pattern, as the following graphs continue to show. Middle-class consumers are more likely to carry a balance than the 90+ percentile earners (53% vs. 20%), but the credit card debt balances are also $1,300 lower, on average.
Self-employed workers are the biggest borrowers, but they’re less likely to carry a balance than employees
Access to credit is another important factor. Lower-income consumers, especially the unemployed, are less likely to get approved, and when they do, the credit lines are typically low. This explains why low-income and unemployed consumers are less likely to carry a balance. The issue of access to credit is also illustrated by the data on self-employed versus employees. All things being equal, self-employed workers are less likely to qualify for a credit card. Employees are more likely to have a balance on their credit card (50% vs. 46%), but their average debt amounts are lower.
Renters are more likely to carry a balance and owe larger credit card debt amounts than homeowners
Your credit score is a key predictor of access to credit. This is well illustrated by the differences between renters and homeowners. Renters are more likely to be younger consumers with lower incomes (source) and lower credit scores. They are also more likely to carry a balance (46% vs. 40%) and owe larger amounts ($3k vs. $1.3k).
Hispanic and African American consumers are more likely to carry a balance on their credit cards, but White cardholders are the biggest borrowers
Sadly, race is still a predictor of income and credit score disparities (source). This is also reflected in credit card usage and debt data. Hispanics and African Americans are more likely to have a balance on their credit card than White non-Hispanic consumers. Still, the average credit card debt of White consumers with a balance is much higher ($2.7k vs. $1.7k and $1.4k).
Country folk and city slickers share their love for credit card debt and are equally likely to carry a balance
Credit card usage and debt do not vary much between urban and rural consumers, but it wasn’t always like that.
Millennials trail behind their seniors in credit card debt
Generation X has the most credit card debt, followed by baby boomers and the Millennials. Millennials come in third on the list. Here’s a breakdown of the average credit card debt for each generation:
However, credit card debt does represent a large percentage of total debt for Millennials
Millennials may have less debt than their seniors, but credit card debt still represents a significant portion of their overall debt. Look how credit type debt volumes vary by age in the graph below.
Millennials prefer debit over credit cards
Millennials tend to prefer debit over credit, according to several polls taken over the past few years. For example, Chime Bank found that 70% of Millennials would rather use a debit card for their purchases.
Part of this can be attributed to the world that Millennials grew up in. In 2008, when the financial crisis hit, consumer debt hit a staggering 127% of disposable income. So, while it’s easy to blame the big banks for causing the Great Recession, Millennials know that their parents also had a hand in the crisis.
Another reason for this is the student loan crisis that seems to continue to get worse. According to the Pew Research Center, the median student debt burden for bachelor’s degree holders falls between $20,000 and $24,999. Postgraduate degree holders typically owe between $40,000 and $49,999.
With such a high student loan balance at graduation, it’s no wonder Millennials are afraid to add to it.
The majority of Americans have great credit
Credit limits are determined by your credit score, but there is some wriggle room
If you’re applying for a new credit card, there’s no guarantee what your credit limit will be. Unlike with other loan types, credit card companies don’t share this information upfront. But according to the American Bankers Association (ABA), you might be able to estimate how much you qualify for based on your credit score.
Based on data gathered from the credit card industry, the ABA found the following average credit limits on new accounts based on VantageScore ranges:
- Super prime (781 to 850 credit score): $10,396
- Prime (661 to 780 credit score): $5,692
- Subprime (500 to 600 credit score): $2,566
Keep in mind that some lenders are willing to give higher credit lines than others. If you don’t get the credit limit you need, consider calling and requesting a credit line increase. Some issuers, like Capital One, even offer automatic credit limit increases on their cards targeted to people with bad or average credit.
Rewards are the most attractive feature for consumers shopping for credit cards
There’s a new set of credit card priorities. Forget balance transfer options. Show me the rewards. The rewards offered by credit cards are increasingly important to users. Balance transfer options and card brand, on the other hand, are becoming less important to consumers.
While some personal finance experts, including money guru Dave Ramsey, consider credit cards to be a one-way ticket to debt town, data shows that most credit card holders don’t carry a balance.
According to the ABA’s Credit Card Market Monitor, 42.4% of credit card holders are considered “revolvers,” meaning they carry a balance from month to month. In contrast, 29.1% of credit cardholders are “transactors,” meaning they pay off their balances in full each month, and 27.2% are “dormants” who didn’t use their credit cards at all in the previous quarter. This is broadly consistent with a Federal Reserve survey, which showed that 48% of adults with a credit card reported carrying a balance.
Prepaid debit cards compete with credit cards, particularly among Millennials
Because Millennials continue to shy away from credit cards, prepaid debit cards have emerged as an alternative payment method. In 2006, prepaid cards accounted for 3.3 billion transactions. In 2015, that number was 10.6 billion.
Some prepaid debit cards have even started to offer credit card-like perks to entice consumers to make the switch. For example, the American Express Serve Cash Back offers 1% cashback on every purchase you make. Others have started to offer benefits like purchase and price protection, perks that previously were reserved only for credit cardholders.
Debit and prepaid cards are a simple way to avoid debt, which explains their popularity among those who grew up during the Great Recession and credit crisis. However, if you can keep your impulse spending in check and you’re responsible with your finances, consider credit cards, if only as a way to build their credit and qualify for a future home or auto loans.
What does this all mean for the future of credit cards and credit card debt?
It’s impossible to know for sure how the credit card industry will change in the future. There are, however, some indicators worth considering.
In the short term, credit card usage and debt will continue to grow
Credit cards are the most popular source of credit. Credit card issuers will want to maximize growth of credit card spending by pursuing high-income consumers with generous signup bonuses, rewards, and perks. Look out for generous rewards and sign up bonuses for travel rewards cards as credit card issuers compete for prime cardholders.
Credit card usage may plateau as Millennials grow older
Millennials are not as enamored with credit cards as previous generations. If this attitude continues, credit cards may lose ground to debit cards and mobile payment options as Millennials gain a more dominant position in the market.
For now, credit cards remain the best option for consumers with prime credit scores who are good at managing their finances and can resist the urge to overspend. It’s hard to compete with a payment method that offers generous rewards and a large signup bonus for simply buying the stuff you regularly purchase.
Credit card trends for 2022
Credit card debt increased by $23.4 billion in March 2022
Consumer debt from credit cards and other revolving plans increased by $23.4 billion in March 2022 — the fastest month-to-month growth since October 2008. Notice how the drops in credit card debt coincide with the stimulus payments of April 2020, December 2020, and March 2021. These were the first significant drops in credit card debt since October 2013.
The situation looks worse when you look at it in the context of overall consumer debt.
Consumer debt increased by $41.9 billion in February 2022
The Federal Reserve reported a $41.9 billion spike in consumer debt for February 2022 — an 11.3% year-over-year increase, the highest rate since November 2001. That put the overall debt of American consumers at $4.48 trillion at the time ($15 trillion including mortgage debt). Total consumer credit has since climbed to $5.11 trillion as of Q4 2025, per the Federal Reserve’s G.19 release.
Credit card interest rates surged from 2022 and are now beginning to ease
Following seven Fed rate hikes in 2022 and four more in 2023, credit card interest rates surged to a peak of 21.47% in Q4 2024. The Federal Reserve cut rates three times in late 2024 and another three times in late 2025, and average APRs have begun to ease — falling to 20.97% for all accounts by Q4 2025. Despite the modest decline, rates remain near historic highs, and American consumers continue to carry record levels of credit card debt.
What is concerning is that prices have increased at a faster rate than wages over this period, savings reserves have been drained for many households, and stimulus support is long gone. These structural pressures are part of why delinquency rates have risen well above their pandemic-era lows.
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Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.
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