Borrowing

Here's how much credit card debt the average American has — and when they think they'll pay it off

If “you’re on the verge of falling behind, speak up.”

Share
Twenty/20

Americans have an average of $5,315 in credit card debt, according to credit bureau Experian's latest findings. That might seem like a big number, but consumers are spending wisely and getting better at paying down their balances. Most people think they can knock that out in about two years.

Researchers at the financial resource website Inside 1031 polled 1,000 U.S. adults with at least one credit card about their credit usage, current debt, and timeline to get their balance to zero.

Of the 56% of respondents who said it would take at least two years to pay off their debt, almost a quarter think it will take two years exactly. Meanwhile, 30% believe their range is between 3 and 5 years. The last 3% don't think they will ever be able to pay off their credit cards.

'If you're on the verge of falling behind, speak up'

For those who say it will take longer to pay their debt, the pandemic is a big reason why. The crisis stretched people's dollars thin and forced many to turn to credit to pay crucial expenses and fill in the financial gaps. About half, 49%, of consumers in the survey said they depend on credit to cover their necessities.

Since March 2020, in fact, 45% have taken on more credit card debt and 55% carry a month-to-month balance. This year, 31% have missed at least one payment, according to the report.  

VIDEO5:1905:19
How people with 10+ credit cards make it work

Video by Mariam Abdallah

There are avenues for help if you need it. If you are missing payments, your score is dropping, and "you're on the verge of falling behind, speak up," says CreditCards.com analyst Ted Rossman. "Many lenders have hardship programs, and nonprofit credit counseling agencies such as Money Management International are excellent resources."

How to tackle credit card debt head-on

Americans are making strides to achieve better credit. The average balance dropped 14% in 2020. FICO scores are up too: The average hit a record 710 last year, and members of most generations saw a bump.

That's great news, Rossman says, "since we're 18 months into an unprecedented pandemic and we endured a sharp, albeit short, recession with a huge spike in unemployment."

A great way to tackle debt is head-on, as long as you have the right tools at your disposal. Experts suggest exploring the possibility of getting a balance transfer card, for example, which allows you to transfer debt from a high-interest card to one that offers no interest from anywhere between a year to 20 months.

Be sure you can pay off the debt before the 0% interest introductory period ends, warns Kim Hardy, CPA/CFF, member of the American Institute of CPAs' Financial Literacy Commission. And watch your spending: "Many of the balance transfer cards also come with the zero APR for purchases, so a lot of people find themselves in more debt than in the beginning, because you're continuing to purchase new items," she previously told Grow.

The biggest step is making a financial plan. "If you can't pay it off within that time, definitely make sure that the interest rate after that introductory period is still saving you money compared to your current interest rate," she added. "The biggest thing is having a plan and making sure you can pay off the debt."

More from Grow: