Facts Matter: The Century Foundation’s Credit Card Report Misreads the Data and Misstates the Market
In March, The Century Foundation released a highly produced report on the credit card market, complete with animated graphics, dramatic framing, and a sweeping claim that America is facing a credit card debt crisis.[1] The presentation is slick. The analysis is not.
Across the report, The Century Foundation repeatedly mistakes context-free figures for evidence of consumer harm. It treats nominal balances as debt burden, payment behavior as inability to pay, APRs as profit margins, and hypothetical rate-cap savings as real-world consumer benefits. The result is a polished presentation built on shaky analysis.
The facts tell a more measured story.
1. Credit Card Balances Are Not Rising as Dramatically as Headlines Suggest
Once inflation and the addition of roughly 39 million new cardholders are taken into account, average credit card balances have remained largely flat over the past decade.
2. More Consumers Are Paying Their Balances in Full
The share of cardholders paying their balances in full each month is higher today than before the pandemic and higher than it was a decade ago.
3. Higher Monthly Payments Can Reflect Faster Debt Repayment
Growing monthly credit card payments does not automatically mean consumers are falling behind. In many cases, consumers are paying down balances more quickly and reducing long-term borrowing costs.
4. Minimum Payments Do Not Automatically Signal Financial Distress
Consumers who make minimum payments are not necessarily unable to pay more. Credit cards often serve as short-term financial tools that help households manage unexpected expenses and income disruptions.
5. Credit Utilization Is Not a Measure of Consumer Hardship
Using a larger share of available credit may affect a credit score, but it is not direct evidence that a consumer is financially distressed or unable to repay debt.
6. APRs Do Not Reflect What Most Consumers Actually Pay
Rising advertised interest rates do not tell the full story of credit card costs. Actual consumer costs depend on payment behavior, fees, balances, and broader interest-rate conditions.
7. Rate Caps Would Likely Reduce Access to Credit
Claims that interest-rate caps would save consumers billions ignore the likelihood that many consumers would lose access to mainstream credit altogether.
8. Credit Cards Are a Response to Affordability Pressures, Not the Cause
The largest pressures on household budgets are housing, health care, food, transportation, child care, and education. Credit cards are often used to help families manage those costs when income and expenses do not align.
9. Banks Do Not Profit When Consumers Cannot Repay
Unpaid debt creates losses for lenders, not profits. A sustainable credit card market depends on consumers successfully managing and repaying their obligations.
Credit cards remain a widely used, highly regulated form of unsecured credit that helps households manage expenses, absorb shocks, build credit, and participate in the modern payments system. A serious discussion of the market should start with the data — not with a crisis narrative in search of support.
What the Data Show: The “record debt” story leaves out inflation — and 39 million cardholders.
The Century Foundation points to the nominal dollar amount of credit card balances and calls it evidence of a debt crisis. But that number leaves out two basic facts:
- Inflation has increased prices and underlying interest rates set by the Fed, and
- There are roughly 39 million more Americans with credit cards than there were eight years ago. [2]
These omissions change the story significantly.
CBA’s analysis shows that once balances are adjusted for inflation and the growth in the number of cardholders, average cycle-ending balances have remained largely flat over the past decade. In fact, real annual average per-cardholder cycle-ending balances decreased by roughly $75 across the CFPB data period.
The Wall Street Journal made the same point, noting that while the absolute dollar amount of U.S. card loans is higher today, that figure “requires some context.” The Journal reported that the average American household holds about $11,500 in card debt, nearly $1,600 less than the 2007 peak after adjusting for inflation.[3]
Where The Century Foundation Goes Wrong: The Century Foundation treats a nominal aggregate balance as if it measures household debt stress. It does not. A national total that ignores inflation and 39 million additional cardholders will almost always look larger over time, even when the average consumer’s inflation-adjusted balance is flat.
Why It Matters: When inflation and consumer growth are included, the “record credit card debt” claim loses much of its force. The data show stability, not an unprecedented surge in real per-consumer credit card debt.
What the Data Show: More consumers are paying in full than they were a decade ago.
The Century Foundation says roughly 111 million Americans “cannot afford” to pay off their credit card balances each month. That figure fundamentally misrepresents the data. The CFPB’s 2025 CARD Act Report shows that 43 percent of cardholders repaid their account balances in full each month in 2024 (see figure below).[4] That is higher than the pre-pandemic range of 36 percent in 2015 to 40 percent in 2019. More recent data from the Philadelphia Federal Reserve on payments for cardholders at large banks show this trend continuing.[5] Put differently, outside the unusual pandemic period, the share of cardholders paying in full is higher than at any point in the CFPB’s data series. At the same time, the share of consumer paying less than 10 percent of their total balance is lower than any point in the series.
Broader debt-service data tell the same story. The Federal Reserve’s measure of consumer debt-service payments as a share of disposable personal income stood at 5.28 percent in the first quarter of this year, compared with roughly 7 percent twenty years earlier.[6]
Where The Century Foundation Goes Wrong: The Century Foundation converts “does not pay in full every month” into “cannot afford to pay.” Those are not the same thing. Consumers revolve a balance for a number of reasons, including having to spread out income or expense shocks over time. Revolving a balance can increase borrowing costs, and some consumers clearly face stress. But the act of revolving is not, by itself, proof that a consumer is unable to pay, much less proof that half of cardholders are trapped.
Why It Matters: If consumers were broadly losing the ability to manage credit card bills, the payment data should be moving in the opposite direction. Instead, data from the CFPB and others show that pay-in-full behavior is record levels, while consumer debt-service burdens remain below levels seen two decades ago
What the Data Show: Higher payments can mean consumers are paying down more debt, not falling further behind.
The Century Foundation says average monthly credit card payments have grown nearly 40 percent since 2018 and claims this shows credit card bills are consuming an increasingly alarming share of family budgets.
That conclusion does not follow. Credit card payments include principal repayment. When consumers pay more toward their balances, monthly payment amounts rise — but that can be a sign of faster repayment, not worsening distress.
The CFPB’s 2025 CARD Act Report points in the opposite direction from The Century Foundation’s framing. The CFPB found that consumers continue to repay a larger share of their outstanding balances (the “payment rate”) than they did before the pandemic. For general purpose credit cards, payment rates were 37 percent of balances by year-end 2024, still above the pre-2020 range.[7]
Some of the increase also reflects higher minimum payment requirements set by banks. In its 2025 review of card agreements, the CFPB found that minimum payment floors ranged from $15 to $50, with the most common floor at $40 — a $15 increase since 2015. The CFPB also reported that average required minimum payments rose in 2024 to $129 for general purpose cards and $81 for private label cards, up from $102 and $69, respectively, in 2022.[8]
These higher minimums are designed to balance the ability for consumers to pay more in principle on their balances while not overloading consumers with monthly payments they cannot meet. The Century Foundation, however, would point to minimum payments as proof that consumers are “trapped in persistent debt.” This ignores a few crucial facts.
First, as the CFPB references in its 2025 CARD Act Report, higher minimum payments allow balances to amortize faster—reducing both the length of time to repay and the total interest paid over the life of the balance.
Second, CFPB data show that that 35 percent of cardholders repaid less than 10 percent of their outstanding balances in 2024-- four percentage points lower than in any of the five years before the pandemic.[9]
Last, The Century Foundation treats all borrowers who make a minimum payment as unable to afford paying more—without providing evidence of this. They observe a payment amount, then assume the financial condition of the borrower.
Credit cards are designed, in part, to serve as shock absorbers. Minimum payments allow consumers to make progress on their debt while providing flexibility to prioritize other needs and obligations. Some minimum-payment consumers are financially stressed. But the payment amount alone does not prove that every one of them is unable to pay more.
The Century Foundation fails to clearly convey whether they prefer for consumers to pay more every month to reduce their debt burden or less every month to reduce monthly payments.
Where The Century Foundation Goes Wrong: The Century Foundation treats both rising monthly payments as evidence that families are under greater credit card strain. But without separating principal repayment from interest and fees — or acknowledging higher required repayment rates — their conclusions are misleading at best. A consumer paying more each month may be reducing debt more quickly, not sinking deeper into it. Similarly, The Century Foundation treats “made a minimum payment” as equivalent to “could only afford a minimum payment”—an unsupported reference that ignores improvement in payment rates and the flexibility they provide.
Why It Matters: Payment size alone does not tell us whether consumers are falling behind, paying down balances faster, preserving liquidity, or using credit cards as temporary shock absorbers. If policymakers mistake higher repayment for higher distress, or assume every minimum-payment consumer is trapped, they will misread the market and overlook industry practices that are actually designed to help consumers pay down balances more quickly.
What the Data Show: Utilization is not the same thing as distress.
The Century Foundation says “debt-stressed cardholders” hold a disproportionate share of credit card debt. But The Century Foundation defines “debt-stressed” largely by credit utilization — specifically, whether a consumer is using 30 percent or more of available credit. That definition does much of the work. If a report defines “debt-stressed” as consumers using more of their available credit, it is not surprising that those consumers also account for a larger share of outstanding balances.
The Century Foundation’s own source does not support their definition. The Century Foundation cites TransUnion for the proposition that 30 percent utilization is a “standard industry benchmark” for credit health. But TransUnion describes utilization as a credit-score factor. It is a measure of how much available revolving credit a consumer is using. In that sense, it is a helpful tool for understanding a consumer’s future capacity to repay—justifying its inclusion in credit scoring models.
However, TransUnion does not use the 30 percent figure as a threshold, saying instead that it is a “popular advice,” not a bright-line test for financial distress.[10] TransUnion also acknowledges why utilization alone is an incomplete measure. Utilization can be temporarily elevated after a large purchase before the card issuer reports a later payoff. And, as TransUnion explains, “not everyone who has a high utilization rate is spending recklessly”; unexpected expenses such as house repairs, car repairs, or medical bills can raise balances. Additionally, higher utilization rates could be a sign that consumers need to use more of their available credit to deal with underlying affordability issues like housing and food costs—not their ability to service existing balances.
Where The Century Foundation Goes Wrong: The Century Foundation labels consumers “debt-stressed” based on a utilization threshold, then treats that label as proof of distress—codifying their own circular reasoning. The data show that these consumers have higher utilization; it does not show, however, that every consumer in the group is unable to pay or financially trapped.
Why It Matters: Policy should be based on direct measures of consumer stress, such as delinquency, charge-offs, payment behavior, and debt-service burdens — not a broad label that turns a credit-scoring metric into a financial diagnosis.
What the Data Show: APR is the sticker price, not the full cost consumers actually pay.
The Century Foundation points to rising credit card APRs and claims banks are widening margins at consumers’ expense. But APR alone does not show what consumers actually pay to use credit cards.[11]
That distinction is not new. After Congress passed the CARD Act, the CFPB found that APRs increased while back-end fees declined or were eliminated. In other words, more of the cost of credit moved into an upfront “sticker” price for consumers to review and compare.
However, the CFPB’s answer was not that rising APRs alone proved consumers were worse off. The Bureau looked instead at the “Total Cost of Credit” — the annualized sum of interest charges and fees consumers actually paid, divided by average outstanding balances — and found that the total cost of credit declined from the fourth quarter of 2008 to the fourth quarter of 2012.
The same framework matters today. CBA’s analysis explains that listed credit card APRs rose from 17.6 percent to 24.9 percent over the last decade, but Total Cost of Credit grew more slowly than APRs. Because most variable-rate credit cards are indexed to the Prime rate, Federal Reserve rate increases explain much of the growth in credit card borrowing costs between 2015 and 2024. Put simply, a major driver of higher stated APRs was monetary policy — not evidence that issuers were quietly padding profit margins.
Where The Century Foundation Goes Wrong: The Century Foundation treats APRs and APR spreads as if they were issuer profit margins. They are not. APR is the advertised price of borrowing for consumers who revolve, not the actual cost paid by all cardholders and not a measure of issuer profit. Many cardholders pay in full and incur no interest at all. For those who revolve, actual cost depends on balances, payment behavior, interest charges, fees, and the broader rate environment.
Why It Matters: Policymakers should measure what consumers actually pay, not just the sticker price. If a report ignores Total Cost of Credit, pay-in-full behavior, Federal Reserve rate increases, and the CARD Act’s shift toward upfront pricing, it will overstate the case that rising APRs prove market failure.
What the Data Show: Rate-cap math ignores the consumers who would lose access to credit.
The Century Foundation claims Americans would have saved hundreds of billions of dollars under a 10 percent credit card interest rate cap. That number sounds precise. The analysis behind it is not.
The Century Foundation’s calculation is based on a flawed analysis that assumes consumers would keep the same credit access, the same credit limits, the same card products, and the same borrowing behavior under a 10 percent rate cap. That is not how credit markets work.
Credit cards are unsecured, revolving lines of credit. Issuers must price for expected losses, funding costs, fraud, servicing, compliance, capital, and the cost of keeping credit lines available. If the law prevents lenders from pricing for risk, lenders do not simply offer the same credit at a lower price. They tighten underwriting, reduce credit lines, limit approvals, change product terms, or stop serving higher-risk segments of the market.
CBA’s analysis of a recent pro-rate-cap paper shows why this matters. Using the paper’s own calculations, a 10 percent cap would make credit card lending economically unfeasible for cardholders with credit scores below 800. That means a 10 percent cap would reduce credit access for roughly 75 percent of current cardholders — more than 150 million Americans. The effect would not be limited to new applicants. Under a binding cap, issuers would also be forced to reduce exposure by lowering credit lines, freezing lines, or closing accounts as balances are paid down.[12]
Those reductions would create additional consequences. Lower credit limits can raise utilization rates, even for consumers who continue to pay responsibly. Higher utilization can lower credit scores, making other forms of credit — including auto loans and mortgages — more expensive or harder to obtain.[13]
Where The Century Foundation Goes Wrong: The Century Foundation treats a 10 percent cap as if it would mechanically lower interest charges for the same consumers using the same credit cards in the same way. That is a static estimate that fundamentally misunderstands how the market and the product work, not real-world market analysis. It counts hypothetical interest savings while ignoring the consumers who would lose access to credit, receive lower limits, or face reduced product benefits.
Why It Matters: A rate cap may sound like consumer protection, but if it restricts access to mainstream credit, it can push consumers toward less regulated, higher-cost, or less flexible alternatives. Policymakers should not confuse theoretical savings on paper with better outcomes for consumers in the real market.
What the Data Show: Credit cards are the shock absorbers, not the shocks.
The Century Foundation frames credit cards as a central driver of America’s affordability problem. But the real affordability pressures facing families come from the essentials: housing, health care, food, transportation, child care, and education.[14]
CBA-supported research by Dr. Alexei Alexandrov found that four major expense categories — health care, shelter, food, and vehicles — account for roughly two-thirds of expanded household spending. For an average household earning about $104,207 a year, or roughly $90,000 after taxes, the largest annual cost centers are shelter at $19,116, vehicles at $10,673 excluding gas, food at $10,163, and direct health care at $6,197.
By comparison, credit card interest is a real cost, but it is not the primary driver of household affordability pressure. CBA’s analysis found that in 2024, credit card interest accounted for roughly $100 a month on average — a little over one percent of the average household budget.
That distinction matters because families do not use credit cards in a vacuum. A household may use revolving credit when a paycheck and a bill do not line up, when a car repair hits, when a medical bill arrives, when hours are cut, or when child care and grocery costs leave almost no room for error. For a household with only a thin monthly cushion, a credit card can be the difference between managing a temporary setback and facing a missed rent payment, utility shutoff, or less regulated borrowing option. The Century Foundation’s analysis largely misses that role
Where The Century Foundation Goes Wrong: The Century Foundation treats revolving balances as evidence of failure rather than asking why households use revolving credit in the first place. Families use credit cards because income and expenses do not always arrive on the same schedule. A regulated credit card, with disclosures, fraud protections, payment flexibility, and the ability to repay over time, is one of the tools that helps smooth that mismatch.
Why It Matters: Weakening access to regulated credit will not lower the cost of housing, health care, food, transportation, childcare, or education. It will leave families with fewer ways to smooth temporary shortfalls and fewer tools to prevent a difficult month from becoming a lasting financial setback.
What the Data Show: A loan that cannot be repaid is a loss, not a business model.
The Century Foundation frames revolving credit as if banks profit when consumers are trapped in debt. That framing misunderstands the basic economics of banking and unsecured lending.
A credit card is unsecured credit. If a consumer cannot repay, the issuer does not collect a windfall. It absorbs a loss. Missed payments mean higher delinquencies, higher charge-offs, collections costs, loss reserves, and accounts that may never repay principal. A sustainable card market depends on consumers using credit they can manage and paying it back over time.[15]
This is the other side of the shock-absorber point. Banks cannot make housing, food, health care, or transportation less expensive. What they can do is provide regulated, transparent liquidity when income and expenses do not line up. That liquidity works only when it is responsible and sustainable.
Where The Century Foundation Goes Wrong: The Century Foundation implies that banks benefit when consumers cannot manage their debt. But inability to repay is not a profit center. It is a credit loss. The sustainable economics of the card market depend on balancing consumers’ need for liquidity, with prudent underwriting and extension of credit.
Why It Matters: Policymakers should distinguish between life’s shocks, and the tools families use to absorb them. Weakening access to regulated credit will not lower the cost of housing, health care, food, or transportation. It will only leave families with fewer ways to keep a difficult month from becoming a lasting financial setback.
Bottom Line
The Century Foundation’s report looks polished, but its analysis repeatedly fails to account for the facts that matter most. It ignores inflation and millions of additional cardholders when discussing balances. It treats revolving as inability to pay, payment behavior as financial diagnosis, APRs as profit margins, and hypothetical rate-cap savings as real-world consumer benefits.
A better analysis starts with the data. Credit card balances are not rising the way the headline number suggests. More consumers are paying in full than they were a decade ago. Very low payment behavior is lower than it was before the pandemic. Consumers are paying more into their balances. And the major affordability pressures facing families are the essentials — housing, health care, food, transportation, child care, and education — not the regulated credit tools families use to manage those pressures.
There is a more useful conversation to have. The CFPB’s own CARD Act Report shows that many consumers with revolving balances are leaving money on the table because they are unaware of options already available in the market. According to the CFPB, 37 percent of cardholders with a balance are unaware of balance transfers, including 50 percent of Millennials and 61 percent of Gen Zers. At the same time, more than 95 percent of credit card solicitations in 2021 and 2022 featured a zero percent introductory rate for a fee of less than three percent.[16]
That is where a serious consumer-focused agenda should begin. If The Century Foundation wants to help consumers reduce borrowing costs, it should start by educating them about the competitive options already available — including balance transfers and zero percent introductory APR offers — rather than advocating for policies that would restrict access to the very credit products families use to absorb shocks.
Credit cards are not the shock. They are one of the shock absorbers. Sound policy should address the real sources of household affordability pressure while preserving access to the regulated financial tools that help families manage through them.
[1] https://tcf.org/content/report/interest-nation-the-state-of-americas-credit-card-debt-crisis/
[2] https://consumerbankers.com/blog/facts-matter-once-adjusted-for-inflation-consumers-credit-card-balances-have-remained-largely-flat-for-a-decade (CFPB data shows there were about 208 million cardholders by the end of 2023, compared with about 169 million Americans with a credit card in mid-2017.)
[3] https://www.wsj.com/finance/investing/america-has-a-credit-card-problem-just-not-the-one-you-think-da0859be
[4] https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2025.pdf
[5] Federal Reserve Bank of Philadelphia. Large Bank Credit Card and Mortgage Data. Accessed Jun. 22, 2026, https://www.philadelphiafed.org/surveys-and-data/large-bank-credit-card-and-mortgage-data.
[6] Board of Governors of the Federal Reserve System (US), Consumer Debt Service Payments as a Percent of Disposable Personal Income [CDSP], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CDSP , June 22, 2026.
[7] https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2025.pdf The payment rate is the share of total cycle-beginning balances paid that cycle.
[8] https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2025.pdf
[9] https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2025.pdf (The CFPB notes that, “a consumer with a $2,000 balance and a 29 percent APR would pay more than $3,000 in interest over nearly 10 years under a minimum payment equal to interest plus 1 percent of the balance or $35. If the same consumer made minimum payments equal to 2 percent of the balance, the payoff period would fall to a little more than six-and-a-half years; at 4.25 percent, interest would fall below $1,000 and the balance would be paid off in just over four years”)
[10] https://www.transunion.com/blog/credit-advice/what-is-credit-utilization-ratio
[11] https://consumerbankers.com/blog/sticker-price-vs-reality-why-apr-doesnt-tell-the-whole-story-of-credit-card-costs/
[12] https://consumerbankers.com/blog/facts-matter-sound-policy-starts-with-sound-analysis-the-case-for-rate-caps-doesnt-hold-up/
[13] https://consumerbankers.com/blog/facts-matter-sound-policy-starts-with-sound-analysis-the-case-for-rate-caps-doesnt-hold-up/
[14] https://consumerbankers.com/blog/affordability-and-the-american-consumer/
[15] See, e.g., https://consumerbankers.com/blog/from-the-cba-data-desk-whats-in-an-apr-what-ogres-onions-and-cake-can-teach-us-about-credit-card-interest-rates/
