Bankrate’s 2025 Credit Card Debt Report

Here’s the kicker about credit card debt — as soon as it starts rolling down the hill, it gains momentum and size thanks to interest. Unfortunately, it’s a slippery slope that many credit cardholders are on.

Credit card interest rates are some of the highest borrowing costs out there, currently averaging above 20 percent. When you carry a card balance, not only are you taking money from your future self, but you’re piling interest on top of interest.

The implications of credit card debt are far-reaching, from pausing major life decisions to feeling like you’ll never pay it off. But with the right tools, it’s possible to tackle your debt before it takes over.

Bankrate’s key insights on credit card debt

Credit card debt puts people’s lives on pause

Nearly 2 in 3 U.S. credit cardholders with debt (64 percent) say they have delayed or avoided financial decisions because of their credit card debt, according to Bankrate’s 2025 Dealing With Debt Survey.

Saving for an emergency (34 percent), investing (23 percent) and buying a vehicle (21 percent) are the most likely to be set back.

Credit card debtors also say they’ve put off helping family and/or friends (19 percent), donating to charity (17 percent), spending on wellness (17 percent, e.g., gym fees, weight management programs, meal delivery services), spending on healthcare (17 percent, e.g., medical procedures, medication) and making home purchases (13 percent).

And when it comes to major life choices, debtors have delayed continuing education and/or job-related training courses (8 percent), different and/or new employment (7 percent), having children (5 percent) and getting married (5 percent).

Missing these milestones shows that credit card debt can hold you back. “This is why it’s so important to pay off your credit card debt as quickly and cost-effectively as possible,” Rossman says.

• Younger generations are more likely to delay financial decisions because of debt
  

  Seventy-five percent of millennials (ages 29-44) have put off at least one thing because of their credit card debt. Most of all, they’ve delayed creating an emergency savings fund (38 percent), investing (30 percent) and spending on wellness (28 percent).

  Gen Zers (ages 18-28) with credit card debt aren’t far behind, at 72 percent who’ve delayed things like emergency savings (27 percent), helping family and/or friends (26 percent) and investing (24 percent).

  Comparatively, 64 percent of Gen Xers (ages 45-60) and 52 percent of baby boomers (ages 61-79) with credit card debt say they’ve put a financial decision on hold.

Most credit card debtors admit that debt impacts their financial choices

Among credit card debtors, more than 4 in 5 (84 percent) say their credit card debt impacts their financial choices — such as whether to make a big purchase, take a vacation or look for a new job.

That includes 29 percent who report their choices as being significantly impacted, 31 percent moderately impacted and 24 percent slightly impacted. Only 12 percent said their debt has no impact, and 4 percent didn’t know.

Nearly half of American credit cardholders still carry debt, many for at least a year

In November 2024, 48 percent of American credit cardholders told Bankrate they carry a credit card balance from month to month.

While the percentage of debtors is almost flat compared to recent surveys, it’s up significantly from the 39 percent who reported carrying a balance in a December 2021 Bankrate survey, which could indicate that Americans have been wrestling with things like inflation and emergency expenses in the last three years.

That’s not to mention the amounts that cardholders are carrying as balances.

“Credit card balances have risen 51 percent since early 2021 and credit card delinquencies are at their highest point since 2011, according to the Federal Reserve,” Rossman says. “High inflation and high interest rates have been a nasty combination, and while the worst is behind us, the cumulative effects are significant and will linger.”

• Boomers are most likely to have a credit card, least likely to carry a balance
  

  Overall, 75 percent of Americans have at least one personal credit card.

  The baby boomer generation of Americans is most likely to have a credit card, while the youngest adult generation, Gen Z is least likely. Eighty-three percent of baby boomers have at least one credit card, followed by 74 percent of millennials, 72 percent of Gen Xers and 68 percent of Gen Zers.

  Among those cardholders, here’s how they rank in terms of whether they are carrying a balance month-to-month:

  • Gen X: 54 percent
  • Millennials: 48 percent
  • Gen Z: 47 percent
  • Baby boomers: 45 percent

  Notably, boomers are the most likely to have a credit card but least likely to have debt. This may result from decades of earning income, lower cost of living as young adults and experience practicing responsible financial habits.

  Although the percentage of Gen Zers (47 percent) carrying credit card debt is in line with other generations, it’s up from Bankrate’s June 2024 survey, when 42 percent of Gen Zers reported carrying debt. Debt among all other generations is down compared to the earlier survey.

• Women and lower-income cardholders are more likely to have credit card debt
  

  U.S. Census data from 2022 reveals women working full-time and year-round earn 84 cents for every dollar earned by their male counterparts, according to Bankrate’s Gender Pay Gap Statistics Study. So it may not come as a surprise that 52 percent of female cardholders carry a credit card balance month to month, compared to 44 percent of male cardholders.

  Less income leaves less room for both necessary and discretionary expenses. For women who want to keep up with today’s cost of living at the same rate as men, it may cost them.

  Female cardholders appeared to be more likely to say their debt was due to day-to-day expenses such as groceries, childcare or utilities (29 percent versus 26 percent of male cardholders) and other emergency/unexpected expenses (18 percent versus 13 percent).

  Meanwhile, male cardholders appeared more likely to point to retail purchases such as clothing or electronics (13 percent versus 10 percent of female cardholders) and car repairs (11 percent versus 7 percent). Several of these differences, however, were within the survey’s margin of error.

  Additionally, lower-income cardholders are more likely to carry debt from month to month:

  • Cardholders with annual household incomes under $40,000: 59 percent
  • Cardholders with annual household incomes between $40,000 and $79,999: 49 percent
  • Cardholders with annual household incomes of $80,000+: 41 percent

Emergency and day-to-day expenses are most common reasons for credit card debt

Among credit card debtors, nearly half (47 percent) say the primary cause was an emergency/unexpected expense(s).

That’s 15 percent who named emergency/unexpected medical bills, 9 percent emergency/unexpected car repairs, 7 percent emergency/unexpected home repairs and 16 percent some other emergency/unexpected expenses.

Meanwhile, more than a quarter (28 percent) cited day-to-day expenses such as groceries, childcare and utilities as the primary cause. Only 11 percent cited retail purchases such as clothing and electronics as the cause of their debt, and only 9 percent blamed vacation/entertainment expenses.

More than half of credit card debtors have carried a balance for at least a year

Fifty-three percent of credit card debtors have been in debt for at least a year — down from 60 percent in June 2024. Another nearly 2 in 5 (38 percent) have been in debt for less than a year.

• Highest-income households are more likely to have credit card debt for at least a year
  

  Interestingly, the highest-income households with credit card debt are more likely to have had debt for at least a year. Here’s what percentages of debtors from each income bracket have had credit card debt for at least a year:

  • Annual household incomes under $40,000: 49 percent
  • Annual household incomes between $40,000 and $79,999: 57 percent
  • Annual household incomes of $80,000+: 57 percent

  The highest income bracket (those earning $80,000+) also includes more than 1 in 5 debtors (22 percent) who’ve been in credit card debt for five years or more.

Nearly 3 in 4 debtors expect to pay off debt within 5 years, but 6 percent think they’ll never pay it off

Thirty percent of credit card debtors expect to pay off their credit card debt in less than a year. Another 41 percent expect to pay it off in one to five years. Thus, close to 3 in 4 debtors (71 percent) believe they’ll pay off their credit card debt within five years.

However, 13 percent think it will take more than a decade to pay off, including 6 percent who say they’ll never get out of credit card debt.

But time is money — in this case, the accumulation of interest.

Let’s say you only make the minimum payment on your credit card balance. According to TransUnion, the average credit card balance is $6,380, and Bankrate says the average credit card rate was 20.42 percent in November 2024.

Using those numbers, if you made payments of $125 each month, you’d be in debt for 121 months — more than 10 years — and end up paying $8,651 in interest, according to Bankrate’s credit card payoff calculator.

4 steps to take toward paying off credit card debt in 2025

Here are a few stepping stones toward managing your credit card debt this year. The sooner you can get ahead of your debt, the less you’ll have to fork over in interest fees.

• Include debt repayment in your budget.
  

  Changes to your budget, including fluctuating costs of living, vacations, big expenses, life events and income adjustments require you to adjust your debt repayment plan. Get ahead of these things by mapping out your budget, making sure to leave room for a set amount of debt repayment. If your expenses exceed your income, try looking for ways to cut back on costs or up your earnings with a raise or side hustle.

• Apply for a balance transfer card.
  

  When used responsibly, a balance transfer card buys you time to pay off your balance interest free. “If you can’t pay [your debt] off right away, sign up for a balance transfer card with a generous 0 percent interest term,” Rossman advises. “Some of these deals last as long as 21 months. You could pay about $300 per month and knock out the average credit card balance in 21 months without owing any interest.”

• Consider a debt consolidation loan.
  

  You could combine several high-interest balances into one personal loan with a lower interest rate. You’ll only have to manage one monthly repayment, and you won’t face the temptation to add more purchases to a the revolving balance of a credit card. Just keep in mind that a loan is still a form of debt, and missed payments will hurt your credit score and lead to more interest charges.

• Work with a credit counselor.
  

  If your credit card debt has become overwhelming, it’s a good idea to get the help of a professional. Many nonprofits offer credit counseling for free or a low fee. As Rossman says, “A solid backup plan, especially if you have a lower credit score or more than $5,000 or $6,000 in credit card debt, is to work with a reputable nonprofit credit counseling agency such as Money Management International.”

The bottom line

With so many credit cardholders in debt, it’s clear that Americans face tough financial circumstances. But it’s imperative to have a plan for debt payoff before interest gets out of control. Debtors might consider signing up for a balance transfer card, working with a reputable nonprofit credit counselor and adjusting their income and expenses to leave room for repayment.

“None of this needs to last forever, but buckling down for a period of time and knocking out your credit card debt can do wonders for your overall financial situation,” Rossman says.

• Methodology
  

  Bankrate commissioned YouGov Plc to conduct the surveys. All figures, unless otherwise stated, are from YouGov Plc.

  2025 Dealing With Debt Survey: Total sample size was 2,417 adults, among whom 822 had credit card debt. Fieldwork was undertaken between Feb. 26-28, 2025. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).

  2025 Credit Card Debt Survey: Total sample size was 2,518 adults, of whom 918 carry a balance on their credit card(s). Fieldwork was undertaken between Nov 13-15, 2024. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).