Americans Paid Off $50 Billion in Credit Card Debt During 1st Quarter of 2024

The average household had a balance of $10,479, up more than 4 percent from last year.

More than a third of American adults have more credit card debt than emergency savings. Frederic J. Brown/AFP via Getty Images

Almost $50 billion in credit card debt was paid off by U.S. citizens in the highest first-quarter total in three years, according to a recent report by personal finance firm WalletHub.

“Outstanding credit card debt decreased by roughly 5 percent during first quarter 2024, compared to the previous quarter,” the June 7 report read. Consumers paid down $49.87 billion in credit card debt, 8 percent more than in the same period last year. That was the highest first-quarter credit card payoff since 2021, when more than $84 billion was paid.

At the end of Q1 2024, the average household credit card balance stood at $10,479, up 4.3 percent from last year. In total, U.S. consumers owed more than $1.26 trillion on credit cards.

Without adjusting for inflation, card debt in April was at a “new record high” for the month; after adjusting for inflation, it was 10 percent below the all-time record for the month.

Bankrate’s 2024 Credit Card Debt Report found that 36 percent of American adults had more credit card debt than emergency savings. Thirty-eight percent were willing to go into debt for nonessential purchases like shopping, eating out, and entertainment.

Recent data from the Federal Reserve Bank of New York found that credit card delinquencies were rising. In first quarter 2023, the share of credit card debt that was 90 days or more delinquent was 4.57 percent. This jumped to 6.86 percent in first quarter 2024.

The rate of credit card debts transitioning into “serious delinquency” continued to increase across age groups, said Joelle Scally, the regional economic principal within the household and public policy research division at the New York Fed.

“An increasing number of borrowers missed credit card payments, revealing worsening financial distress among some households,” Ms. Scally wrote.

Easing Credit Card Burden

In March, the Consumer Financial Protection Bureau (CFPB) has finalized a rule slashing credit card late fees from the current average of $32 down to $8.

The move has met with opposition from banking groups, who warn that limiting credit card late-payment charges will result in more late payments and reduced credit access.

In April, Sen. Tim Scott (R-S.C.) introduced the Congressional Review Act, aiming to overturn the CFPB’s rule, which he said would “decrease the availability of credit card products and important financial services, particularly for Americans who need them most.”

Senate Majority Leader Chuck Schumer (D-N.Y.) criticized the bill, accusing Republicans of “doing the bidding of the big credit card companies.”

On June 11, the CFPB proposed a rule that removes medical bills from credit reports. The measure would stop credit reporting firms from sharing medical debt information with lenders. It would prohibit lenders from using medical information to make decisions on whether to lend or not.

The proposed rule also seeks to prevent debt collectors from “coercing payments for inaccurate or false medical bills,” the agency stated.

The CFPB claims that the rule, if it comes into effect, will remove up to $49 billion in medical debts that “unjustly lowers credit scores” of 15 million American citizens.

“Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans,” CFPB director Rohit Chopra said.