Bankrate’s 2025 Credit Card Debt Report

Americans have a love-hate relationship with their credit cards. Though many people try their best to pay their cards off in full, a large percentage of American credit cardholders are carrying a balance from month — and it’s proving costly.

After over a year of record-high interest rates, the Federal Reserve cut the federal funds rate three times in the second half of 2024. But credit card borrowers are still paying a record-high average annual percentage rate (APR) of over 20 percent, according to Bankrate. In other words, today’s Americans taking on credit card debt pay much more in interest than they would have on that same debt only a few years ago. On top of that, stubborn inflation has contributed to many Americans going into debt to finance their normal levels of spending.

To keep up with the country’s changing credit card habits, Bankrate conducted several surveys with polling agencies YouGov Plc and SSRS in the last year. In each poll, Bankrate surveyed between 1,000 to 2,000+ Americans over the age of 18 on topics like credit card usage, how long they’ve maintained a balance and if they’re prioritizing paying down that balance.

The resulting data, weighted to represent all U.S. adults, shines a light on Americans’ struggles with credit card debt. As of November 2024 polling, almost half (48 percent) of credit cardholders carry debt from month to month, according to Bankrate’s latest Credit Card Debt Survey.

Read on for a snapshot of Americans’ attitudes and habits on credit card debt. Bankrate will update this with new data throughout the year.

Key takeaways

Emergency expenses are fueling credit card debt — which can linger for years

Nearly half of credit cardholders (48 percent) carry debt from month to month, according to our Credit Card Debt Survey. That’s down from 50 percent in June 2024, but up from 39 percent in 2021:

Source: Bankrate’s Credit Card Debt Surveys
Note: Among respondents who are credit cardholders

Personal finance experts recommend paying your credit card in full every month to avoid high interest rates on your purchases. But in practice, more than half (53 percent) of U.S. adults who carry a balance on their credit cards have had the balance for at least a year. While that’s down from 60 percent in June 2024, it’s up from 50 percent in late 2021.

Unfortunately, many people carrying credit card debt have that debt due to an emergency. Nearly half (47 percent) of people who carry a balance on their credit cards say the primary cause was an emergency or unexpected expense, which includes medical bills (15 percent), car repairs (9 percent), home repairs (7 percent) and other emergency or unexpected expenses (16 percent). Others cited routine expenses: 

• Day-to-day expenses, such as groceries, childcare and utilities: 28 percent
• Retail purchases, such as clothing and electronics: 11 percent
• Vacation/entertainment expenses: 9 percent

Pay off your credit card debt

Starting to pay off credit card debt aggressively isn’t easy. These payoff strategies give you a place to start.

How to pay off credit card debt

The majority (71 percent) of credit cardholders who carry balance(s) from month to month expect to pay off their credit card debt within five years, including 30 percent who expect to pay it off within a year and 41 percent who expect to pay it off between one and five years from now. On the other hand, 13 percent expect it will take more than a decade to pay off their debt, including 6 percent who expect to never get out of credit card debt. 

“If you have credit card debt, take matters into your own hands to pay it down as quickly as possible,” Bankrate Senior Industry Analyst Ted Rossman says. “If you can’t pay it off right away, sign up for a balance transfer card with a generous 0 percent interest term. Some of these deals last as long as 21 months.”

• Credit card debt, by generation
  

  Gen X credit cardholders are the likeliest generation to carry credit card balance(s) from month to month:

  • Gen Z credit cardholders (ages 18-28): 47 percent
  • Millennial credit cardholders (ages 29-44): 48 percent
  • Gen X credit cardholders (ages 45-60): 54 percent
  • Baby boomer cardholders (ages 61-79): 45 percent

A record-high percentage of Americans have more credit card debt than savings

Having an emergency fund with at least three months of expenses saved is a vital resource in case of a job loss or unexpected bill, but 36 percent of U.S. adults have more credit card debt than emergency savings, according to our Emergency Savings Report. That’s a record-high percentage — the highest (tied with 2023) since Bankrate began asking the question in 2011. Additionally, 54 percent of U.S. adults have more in their emergency fund or savings, and 10 percent have no credit card debt and no savings.

Source: Bankrate’s Emergency Savings Report, Jan. 19-21, 2024
Note: Percentages don’t total 100 due to rounding.

Compared to 2023, more Americans say they want to tackle their debt in 2024. When asked to choose whether paying down debt or building emergency savings is a higher priority for them, 25 percent of people say they’re prioritizing paying down debt, up slightly from 23 percent in 2023.

In 2024, 36 percent said they were focused on both paying down debt and increasing emergency savings at the same time:

• Focused on both at the same time: 36 percent
• Increasing emergency savings: 28 percent
• Paying down debt: 25 percent
• Neither one is a priority: 11 percent

• Credit card debt vs. emergency savings, by generation
  

  When asked to compare their emergency savings and credit card debt, baby boomers are the most likely generation to have more in an emergency fund or savings. They’re also the least likely to have more credit card debt:

  We asked: Which is higher — your credit card debt or the money you have in your emergency fund or savings account? 

  	Gen Zers (ages 18-27)	Millennials (ages 28-43)	Gen Xers (ages 44-59)	Baby boomers (ages 60-78)
  Source: Bankrate’s Emergency Savings Report Note: Not all percentages total 100 due to rounding.
  Amount in emergency fund or savings	49%	46%	47%	68%
  Credit card debt	32%	46%	47%	24%
  I have no credit card debt and no savings	20%	9%	6%	8%

  Millennials, however, are the most likely generation to be focused on both increasing emergency savings and paying down debt at the same time.

  We asked: Which is a higher priority right now for you? 

  	Gen Zers	Millennials	Gen Xers	Baby boomers
  Source: Bankrate’s Emergency Savings Report Note: Not all percentages total 100 due to rounding.
  Focused on both at the same time	33%	43%	38%	31%
  Increasing emergency savings	27%	29%	22%	30%
  Paying down debt	28%	22%	31%	21%
  Neither one is a priority	12%	6%	9%	18%

   

Debt commonly negatively affects Americans’ mental health

As a large percentage of Americans continue to carry credit card debt, 47 percent of U.S. adults say money causes a negative impact on their mental health, at least occasionally, according to our Money and Mental Health Survey. In comparison, 39 percent of people cite their own health and 38 percent cite current events (such as world news, politics, climate change, etc.).

Specifically, 47 percent of U.S. adults who say money causes a negative impact on their mental health cite being in debt — like credit card debt, medical debt or student loan debt — as a reason why. People also cited other factors that may have contributed to carrying debt, such as inflation and rising prices (65 percent) and rising interest rates (28 percent):

Source: Bankrate’s Money and Mental Health Survey, March 18-20, 2024
Notes: Participants could select more than one answer; Percentages are of U.S. adults who have money concerns that impact their mental health
 

“When we worry about things, a lot of the time it’s because we feel out of control. Take some of that power back by putting a plan together,” Rossman says.

• People who cite debt as negatively impacting their mental health, by generation
  

  Perhaps because they’ve had less time to accumulate debt than older generations, Gen Zers whose mental health is negatively affected by money, at least occasionally, are the least likely generation to cite being in debt (30 percent) as a reason why:

  • Gen Zers: 30 percent
  • Millennials: 53 percent
  • Gen Xers: 50 percent
  • Baby boomers: 48 percent

Many Americans would take on more debt to travel or dine out

Despite the rising percentage of people already in credit card debt, Americans say they’re willing to go into debt for the sake of experiences. Nearly 2 in 5 (38 percent) U.S. adults were willing to go into debt to travel, dine out or see live entertainment in 2024, according to our Discretionary Spending Survey. The highest percentage of people would be willing to take on debt to travel, at 27 percent, followed by dining out (14 percent) and live entertainment (13 percent):

Source: Bankrate’s Discretionary Spending Survey, March 4-6, 2024
Note: Respondents could select more than one option.

The demand for entertainment away from home comes even as inflation and high interest rates weaken consumers’ buying power today, according to Rossman.

“Some of that reflects a ‘you only live once’ mentality that intensified during the pandemic, and some of that is because many economic indicators — including GDP growth and the unemployment rate — are in favorable shape,” Rossman says. “But there’s a lot of inequality in the economy, and that’s very evident in these results.”

• Willingness to go into debt for discretionary purchases, by generation
  

  Millennials and Gen Zers are far more likely than older generations to go into debt for these discretionary purchases. Notably, 35 percent of millennials would go into debt this year to travel:

  We asked: For which, if any, of the following purchases would you be willing to take on debt in 2024?

  Purchase	Gen Zers  (ages 18-27)	Millennials (ages 28-43)	Gen Xers (ages 44-59)	Baby boomers (ages 60-78)
  Source: Bankrate’s Discretionary Spending Survey Note: Respondents could select more than one option.
  Travel	30%	35%	23%	22%
  Live entertainment (e.g. concerts, sporting events, theater performances, etc.)	22%	23%	7%	4%
  Dining out	22%	23%	9%	8%
  None of these	47%	49%	70%	74%

   

Many people are focusing on credit card rewards even as they carry a balance

Despite the high percentage of people who carry a balance on their credit cards, the majority of people are chasing credit card rewards. One-third (33 percent) of credit cardholders say they make every effort to maximize credit card rewards and 39 percent say they make some effort, according to our Chasing Rewards in Debt Survey.

Despite not having their cards paid off, 67 percent of people who carry a balance on their credit cards make an effort to maximize credit card rewards, at 27 percent making “every effort” and 40 percent making “some effort.” Over 1 in 3 (33 percent) credit cardholders who carry a balance make no effort to maximize credit card rewards.

Source: Bankrate’s Chasing Rewards in Debt Survey, Jan. 24-26, 2024
Note: Not all percentages total 100 due to rounding.

Flashy rewards are a big incentive to use credit cards, but Rossman believes people who take on debt to collect rewards aren’t using their cards wisely.

• Credit cardholders who maximize rewards, by generation
  

  Gen Z credit cardholders are the most likely generation to put in some effort to maximize credit card rewards. Gen X and baby boomer credit cardholders are tied as the generations most likely to make no effort to maximize credit card rewards at all.

  We asked: Which, if any, of the following best describes your credit card rewards strategy? 

  	Gen Z cardholders  (ages 18-27)	Millennial cardholders (ages 28-43)	Gen X cardholders (ages 44-59)	Baby boomer cardholders  (ages 60-78)
  Source: Bankrate’s Chasing Rewards in Debt Survey Note: Not all percentages total 100 due to rounding.
  I make every effort to maximize credit card rewards	35%	36%	31%	30%
  I make some effort to maximize credit card rewards	42%	38%	39%	39%
  I make no effort to maximize credit card rewards	23%	26%	31%	31%

   

The bottom line

If you’re one of the millions of Americans carrying credit card debt from month to month, you may already know that paying it down can be an exhausting, uphill battle. While credit card debt is nothing to be ashamed of, it’s vital you make a plan to pay it off. Otherwise, high interest could cause your debt to spiral out of control.

Set aside a portion of your discretionary budget to pay more than the minimum on your credit card every month. If your budget is tight, you may need to get creative. Funnel any extra funds, like from a side hustle, work bonus or tax refund, towards credit card debt, and see where you can cut back in other categories in your budget. Any amount you can spare over your minimum will put you one step closer to paying off that debt for good.

You have different methods at your disposal to tackle your debt depending on what works best for you. If you have debt with very high interest rates (such as credit card debt), consider the debt snowball payoff method, where you pay your highest-interest debts first to avoid paying more in the long run. Or, if you need a motivational boost, you can pay your smallest debts first and work your way up to your largest debts, a method called the debt snowball.

Another strategy is a 0 percent balance transfer card, which allows you to move your balance to a new card with 0 percent interest for a limited time, often 12 to 21 months. You can use that time to aggressively pay down your principal without worrying about racking up additional interest.

No matter what strategy you choose, paying off debt is something to celebrate. Congratulate yourself on the win and know you’re one step closer to financial freedom.

• Methodology
  

  Bankrate commissioned YouGov Plc to conduct the survey on credit card balances. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,350 U.S. adults, including 2,518 cardholders. Fieldwork was undertaken between November 13-November 15, 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

  The study on credit card debt and emergency savings was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from January 19 – January 21, 2024 among a sample of 1031 respondents. The survey was conducted via web (n=1001) and telephone (n=30) and administered in English (n=1005) and Spanish (n=26). The margin of error for total respondents is +/- 3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.

  Bankrate commissioned YouGov Plc to conduct the survey on money and mental health. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,364 adults, of whom 1,109 have concerns over money which impact their mental health. Fieldwork was undertaken between 18th – 20th March 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

  Bankrate commissioned YouGov Plc to conduct the survey on discretionary spending. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,276 US adults. Fieldwork was undertaken between 4th – 6th March 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

  Bankrate commissioned YouGov Plc to conduct the survey on credit card rewards. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,239 adults, of whom 1,740 were credit cardholders. Fieldwork was undertaken between 24th – 26th January 2024.  The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.