Overview

Amidst headlines about the growing affordability crisis, credit cards and credit card debt are commonly assigned the lion’s share of the blame for rising costs pushing household budgets to the brink. However, Americans are managing their credit cards well and more Americans than ever have access to credit through their credit cards. Credit cards serve as a safety net when there are unexpected expense shocks and help Americans navigate the rising costs of every day needs. 

The State of Credit Cards: The Facts

Credit card consumers are managing their credit card debt as well as they have at any point since the Consumer Financial Protection Bureau (CFPB) began collecting data on debt in 2015, according to trends found in the 2025 Consumer Credit Card Market report from the CFPB.

1. Real per-consumer credit card balances are largely flat from 10 years ago.

Recent Consumer Bankers Association (CBA) analysis highlights that, when controlling for an increase in card holders and inflation, the average per-cardholder cycle-ending balance has decreased slightly, staying largely flat, in comparison to 2014.

2. A higher share of consumers are paying off their account balances in full than ever before, excluding the pandemic stimulus years.

As highlighted in a previous CBA blog, data from the CFPB shows that 43 percent of cardholders paid off their account balances in full, the highest level outside of the stimulus period in 2021 to 2022. This share of cardholders remains elevated over pre-pandemic levels, which range from 36 to 40 percent of cardholders paying off their account balances in full from 2015 to 2019.

3. Revolvers are paying off more of their outstanding balance than before the pandemic.

The CFPB reports that revolvers, or credit card holders who carry a balance month-to-month and incur interest, are paying off their outstanding balances at higher levels than before the COVID-19 pandemic. Payments have increased five percentage points for general purpose credit cards, while payment rates for private label cards have remained flat.

While the number of consumers who have only paid the minimum payment at least once in a year hit record-high levels in 2024, the high credit card payment rates and shares of accounts paid in full point to consumers recovering well and “bouncing back” to a better level of performance with their credit card debt management.

4. Fewer cardholders are paying off 10 percent or less of their total balance than ever before, excluding the pandemic stimulus years.

More cardholders are paying at least 10 percent of their total balance than the pre-pandemic years; only 35 percent of cardholders are paying 10 percent or less of their total balance. As highlighted in an earlier CBA blog, this improvement in payment behavior is at least partially attributable to the industry’s steady raising of the minimum payment requirements since 2015.  

5. Interest is a little over one percent of average household budgets, roughly $100 a month, or 1₵ out of every dollar.

While total credit card interest paid by consumers rose to $160 billion in 2024, recent research highlights that annual and late credit card fees are very small portions of household budgets, slightly over one percent. Similarly, according to CFPB data, the average account incurred 0.9 late fees per year, or $27 in missed payment fees.

What Credit Cards Do for Americans

Credit cards act as a source of short-term liquidity for American households, allowing consumers to spread the costs of expenses over time rather than falling into more severe financial distress when faced with rising costs or unexpected expenses.

Lower- and middle-income households have very little wiggle room when it comes to essential expenses. CBA has previously highlighted how the impact of rising costs is felt differently across income levels. The bottom two income quintiles have limited savings and experience more income and expense volatility, leading them to feel rising costs more intensely than higher quintiles.

Expense shocks, or large, unexpected costs, are common amid rising expenses. The four major expense categories, consisting of healthcare, shelter, food, and vehicles, account for two thirds of household expenditures. While managing increased costs, nearly 60 percent of American consumers report having experienced at least one expense shock a year. As Americans manage expenses, they are utilizing a range of tools, including credit cards.

Credit cards are a key shock absorber to help consumers weather expense shocks through increased liquidity.

Roughly half of credit card accounts are “transactor” accounts, meaning that their balances are paid off in full monthly and do not incur interest. This means that transactors are essentially receiving a free loan for 30 days to help smooth over expenses.

The other half of accounts are “revolvers,” accounts that carry a balance and incur interest. By borrowing money from card issuers, revolvers are able to spread unexpected expenses over time rather than face an immediate additional strain on their finances.  Credit cards are one of only two loan products subject to ability-to-pay requirements. This requirement is in place to protect consumers from incurring more debt than they can handle, by requiring issuers to account for a “consumer’s ability to make the required minimum periodic payments under the terms of the account.”

The Bottom Line

While inflation is coming down, consumers continue to navigate making ends meet in an environment of higher costs on everyday goods. Credit cards act as an important bridge for consumers amid rising costs and expense shocks. A closer look at the data paints a more complete picture that demonstrates the importance of credit cards for both consumers, and the broader economy. Artificially capping interest rates would not meaningfully address affordability concerns and would ultimately restrict Americans’ access to credit. Even proponents of APR rate caps cite data that indicates that a cap would limit access to credit for consumers with credit scores less than 800 FICO. The overwhelming majority of Americans fall below that line and could face coming up short without a safety net.