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Credit Card Debt Trends in 2023

Overall Credit Card Debt Increases to Nearly $1.07 Trillion

In 2023, total credit card balances grew by $157 billion, reaching nearly $1.07 trillion by the end of the third quarter. This 17% increase from the previous year was spread over a larger number of credit card accounts, which grew by more than 8%.

Average Credit Card Balance Up 10%

The average credit card balance among consumers rose to $6,501 in Q3 2023, marking a 10% increase from Q3 2022. This reflects changing consumer habits, elevated interest rates, and ongoing inflation.

State-by-State Increase in Average Credit Card Balances

Average credit card balances increased by 7% to 13% across various states. The Western U.S. saw the most significant increases, with states like Arizona, California, and Nevada experiencing double-digit growth in average balances.

Average Credit Utilization Inches Up

The average credit utilization ratio climbed to 29% in 2023, up from 28% in 2022. This increase is due to average balances growing faster than average credit limits. Lower utilization ratios are better for credit scores, so it’s essential to keep this ratio below 30%.

Generational Differences in Credit Card Balances

Millennials saw the fastest-growing average credit card balances in 2023, with a 15.4% increase. However, Generation X holds the highest average balances, exceeding the national average by more than 40%.

Impact of Higher Monthly Bills on Credit Card Balances

Experian’s survey revealed that 58% of respondents experienced significant increases in their monthly bills, affecting their ability to pay down credit card balances. Higher insurance premiums and utility costs were the most common culprits.

Credit Card Trends to Watch 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 APRs exceeding 20%, refinancing options like balance transfer cards and debt consolidation loans are becoming more attractive.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team is here to help you navigate your financial journey with ease and expertise.

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