Rachit Pareek

Credit Card Debt in the US

2026-01-29 | 3 min read

Credit Card Debt in the US

I’ve been reading about the commotion around BILT’s 2.0 credit card launch, and it got me wondering: how much money do credit card companies actually make, and how much credit card debt is just sitting out there at any given point in time?

While writing this, it wasn’t lost on me how lucky I am to always have paid off my credit card bills within the same cycle the purchases were made. Through a combination of either mismatch between payday timings and/or spending above one’s means, this is not always the case for many Americans.

The Numbers

Some basic research showed me that about 46% of Americans carry a credit card balance from month to month. The remainder are paying in full and avoiding interest charges. This means that about half of accounts are generating interest payments, which, along with interchange fees, pay for the bonuses that many cards provide. Approximately 3% of accounts are delinquent, meaning they didn’t make even the minimum payment on time. About 80% of the profit from a credit card for a credit card issuer comes from interest payments.

Across the United States, there is approximately $1.2 trillion worth of credit card debt outstanding at any given point in time. As an example, for the quarter ending on September 30th, 2025, Capital One reported that they had about $254 billion in outstanding loans with a delinquency rate of about 3.89%, meaning about $9.9 billion worth of those loans were delinquent.

According to MarketWatch, in 2024 Americans paid about $160 billion in credit card interest. About 195 million Americans had credit cards in 2024, meaning about 92 million carried a balance. That works out to approximately $160 billion over 92 million, about $1,740 of interest per person carrying debt per year.

Over 550,000 cases of individual and business bankruptcy filings happened in 2025, but I wasn’t able to find clear numbers on what percentage of those are caused by credit card debt specifically.

Why People Carry Balances

Some of the reasons that people tend to carry these balances include:

  1. Cash flow timing mismatch — Income can come in lumps while expenses can all hit at once, including rent, car payments, insurance, etc.
  2. Limited credit options — It’s possible that someone doesn’t have any better credit options available.
  3. Sudden large expenses — Unexpected costs can show up that exceed what someone has on hand.
  4. Lack of understanding — An ongoing lack of understanding about how quickly interest charges can rack up when holding an outstanding balance.

Potential Solutions

To address the timing mismatch problem, there are companies that offer early access to your salary/wages before pay date, such as DailyPay.

There are also school districts that are requiring financial literacy curriculum in elementary, middle schools, and high schools as part of their core graduation requirements. Da Vinci Schools includes high school financial literacy education as part of core graduation requirements, and Fairfax County (FCPS) has a personal financial literacy curriculum in elementary and middle school units.

Studies have found that teaching personal finance in schools is associated with positive effects on financial literacy, including higher credit scores and reduced credit card delinquency among the cohorts exposed to such education. (The NEA has some good resources on this.)

Resources