“Credit Card Balances Surge: A 2023 Analysis”

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Overall Credit Card Debt Increases to Nearly $1.07 Trillion in 2023

Credit card debt in the U.S. has surged to nearly $1.07 trillion by the third quarter of 2023, marking a significant increase from previous years. This 17% rise from Q3 2022 is spread across a growing number of credit card accounts, which have increased by over 8% in the same period.

Average Credit Card Balance up 10%

The average credit card balance among consumers has risen by 10% to $6,501 as of Q3 2023. This increase reflects changing consumer habits, elevated interest rates, and ongoing inflation.

Average Credit Card Balances by State Increase From 7% to 13%

Credit card balances have increased across all states, with some states experiencing growth rates between 7% and 13%. The Western U.S. saw the most significant increases, with states like Arizona, California, and Nevada leading the way.

Average Credit Utilization Inches Up

The average credit utilization ratio has climbed to 29% in 2023, up from 28% in 2022. This increase is due to average balances growing faster than average credit limits, which can impact credit scores.

Millennials Have Fastest-Growing Average Credit Card Balances; Gen X the Highest Average Balances

Millennials have seen the fastest growth in average credit card balances, increasing by 15.4% to $6,521 in 2023. However, Generation X holds the highest average balances at $9,123, significantly above the national average.

Higher Monthly Bills May Be Impacting Credit Card Balances

Experian’s survey of 1,237 credit card users in March revealed that 58% of respondents have seen significant increases in their monthly bills. This has impacted their ability to pay down credit card balances, with insurance premiums and utilities being the most common culprits.

Credit Card Trends to Look Out For in 2024

Consumers may increasingly use credit cards to cover monthly bills due to rising costs. Banks are becoming more selective in offering credit, often requiring higher credit scores and offering lower credit limits. With average credit card APRs exceeding 20%, refinancing options like balance transfer cards and debt consolidation loans are becoming more attractive.

At O1ne Mortgage, we understand the challenges of managing credit card debt. If you’re looking for mortgage services to help consolidate your debt or manage your finances better, call us at 213-732-3074. Our team of experts is here to assist you with all your mortgage needs.

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