How Americans are Struggling with Credit Card Debt in 2025
Many Americans are finding themselves in a tough spot at the beginning of 2025, especially when it comes to credit card debt. A recent report by Bankrate reveals that almost half of cardholders, 48%, now carry debt from month to month, which is an increase from 44% in 2024. Of those carrying balances, 53% have been in debt for at least a year.
The reasons for carrying debt vary, with 47% of borrowers citing unexpected or emergency expenses like medical bills or home repairs as the main culprits. Factors like high inflation and interest rates have contributed to the accumulation of debt, according to Ted Rossman, Bankrate’s senior industry analyst.
The average credit card balance per consumer has risen to $6,380, up 4.8% year over year. The impact of this debt can be substantial, with Rossman calculating that it would take over 18 years to pay off the average balance with minimum payments, costing over $9,344 in interest.
Over the holiday season, 36% of consumers added to their debt load, with 21% expecting it to take five months or longer to pay it off. WalletHub’s report also highlights that 24% of Americans may need more than six months to pay off their holiday shopping debt due to overspending caused by inflation.
To tackle credit card debt, Rossman suggests consolidating with a 0% balance transfer card, which could help pay off the debt without owing any interest. Despite this option, many credit cardholders still expect to take varying amounts of time to pay off their debt, with 13% expecting it to take more than a decade.
In conclusion, dealing with credit card debt can be challenging, but understanding the options available and taking proactive steps can help consumers get back on track financially.