Americans are not okay financially, according to the Philadelphia Federal Reserve.
The share of active credit card accounts making just the minimum payment hit a 12-year high of 10.75% from July through September 2024, based on data from the largest banks in the country, the Philadelphia Fed said on Wednesday. As credit card balances swell, the share of delinquent balances is also worsening, it said.
Despite broader economic data showing that consumers remain resilient and spending is strong, these data paint a different picture.
“These credit card data are showing warning signs of consumer stress,” said Andrew Kish, assistant vice president in the Financial Monitoring Group of the Philly Fed. “More borrowers are falling behind on their credit card payments…We’ll be closely watching these performance measures in the coming quarters to monitor the health of consumers.”
Why do data tell such different stories?
Broad economic indicators and statistics lump all consumers together in what’s called aggregate data, which means unique experiences of consumers at different income levels can get overlooked, economists said.
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“The disheartening truth is that upper-income consumer segments can largely offset the struggles at the lower end,” Wells Fargo economists said in a report earlier this month. Upper-income consumers can boost “overall consumer spending to still run above 2% this year and signal ‘business as usual’ when it is anything but usual for a large segment of the population.”
For lower-income consumers, credit reliance is up and saving rates are down, the economists said.
Lower and middle-income household saving rates turned negative in early 2022 as those consumers drew down rainy-day funds for the better part of two years, Wells Fargo said. Savings are positive again but below pre-pandemic levels.
“What appears as stout spending today comes at the cost of more vulnerable finances for the working poor,” they said.
How bad is it for average Americans?
Of 1,065 workers surveyed in December, 73% struggle to afford anything beyond their basic living expenses and about a third have taken on debt to cover them, according to Resume Now’s 2025 Wage Reality Report.
On average, a household with revolving credit card debt owes $10,563, a NerdWallet survey of 2,000 adults showed.
“Carrying that debt is costlier today than in periods of lower interest rates, and some households are simply struggling to stay current on servicing these outstanding balances,” Wells Fargo economists said.
Revolving card balances reached $645 billion from July through September 2024, representing 52.5% growth since a decade low of $423 billion in mid-2021, Philadelphia Fed data showed. Total card balances rose to $914 billion, the highest since 2012 when the Philadelphia Fed began tracking this data.
“Consumers are not only spending more, leading to higher balances, but paying off less, increasing revolving amounts,” the Philadelphia Fed report said.
Credit card balances 30+ days past due also rose to 3.52% from July through September 2024, more than double the delinquency rate of 1.57% at the pandemic low from April through June 2021, the Philadelphia Fed said.
Can Americans catch up?
It’s not easy to erase credit card debt, as some Americans that USA Today tracked over the last year have shown. But some things to try, experts said, include:
- Make more than the minimum payment on credit card balances, whenever you can; otherwise, consumers may end up in debt for decades and pay thousands of dollars more in interest.
For example, TransUnion says the average credit card balance is $6,380. Assuming a 20.27% credit card rate and only monthly minimum payments, you’ll be in debt for 218 months (more than 18 years) and will end up paying $9,344 in interest .
- Sign up for a balance transfer card with a generous 0% interest term. “You could pay about $300 per month and knock out the average credit card balance in 21 months without owing any interest,” said Ted Rossman, senior industry analyst at comparison site Bankrate.
- For those with a lower credit score or more than $5,000 in credit card debt, consider working with a reputable nonprofit credit counseling agency such as Money Management International, Rossman said. A credit counselor can help you develop a payment plan and budget to keep you on track.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
