2024 was a year that looked good and felt bad, financially, for many. According to BW’s annual household debt analysis, revolving credit card debt is up year-over-year, but only slightly, and the gap between cost of living and income growth is narrowing, pre-pandemic to now. Theoretically, this should lead to more positive feelings, as it’s an improvement on the past few years. But emerging from an election season where the economy was top of mind and ballot, it’s clear that the broader economy still doesn’t feel right at a household level.
BW’s annual analysis of household debt finds that revolving credit card debt is up just 1.5% compared to 2023. On average, a household with revolving credit card debt owes $10,563. [1] Mortgage, auto loan, student loan and overall total household debt have also all increased slightly from last year.
Here’s a breakdown of what U.S. households owed in total and the average amount per household with each type of debt, as of September 2024 [2]:
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Total owed by an average U.S. household with this debt |
Percentage change for total owed between 2023 and 2024 |
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* This debt can include mortgages, home equity lines of credit, auto loans, credit cards, student loans and other household debt, according to the Federal Reserve Bank of New York.
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A note about this year’s data
Our annual report analyzes government data from sources such as the U.S. Bureau of Labor Statistics and the Federal Reserve Banks of New York and St. Louis to show how household debt has changed since 2023. Additionally, BW commissioned a survey to capture consumer sentiment on credit card debt.
The survey of more than 2,000 U.S. adults, conducted online by The Harris Poll in November 2024, asked Americans if they carry revolving credit card debt and, if so, what types of expenses contributed to their balances. We also asked about their debt payoff plans.
Key findings
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Major household expenses have increased more than income over the past five years. Since 2019, median household income has gone up 21%. [3] During that time, cost increases of food (27%), housing (26%) and transportation (28%) have outpaced that income growth. [4]
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Revolving credit card debt is made up of a mix of essentials and non-necessities. According to our survey, 48% of Americans who currently have revolving credit card debt say paying for necessities contributed to their balances. But not all debt is made up of essential expenses: 41% say shopping — for non-necessities like luxury goods and electronics — led to some of their debt.
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Interest costs could nearly triple the average debt for those making minimum payments. For a household with the average revolving credit card debt of $10,563, making just the minimum payments could mean a total cost of $28,683, after factoring in interest expenses.
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Some indebted Americans are waiting for higher income to pay off their balances. According to the survey, 30% of Americans with revolving credit card debt say they plan to pay it off once they make more money. Interestingly, those with a household income of $100,000+ aren’t any less likely to say this than those who have a lower household income (30%, compared to 29% among those with a household income of less than $100,000).
“It’s hard to feel good about any positive economic news when you’re struggling to afford your expenses,” says Sara Rathner, a BW credit cards expert. “Debt doesn’t just happen because of frivolous spending. For many, credit cards help fill the gaps when your income isn’t enough to afford necessities.
“It can unfortunately be a very expensive way to get by.” If you’re unsure how to start tackling your debt, consider these methods:
1. The snowball method: Pay off debts from lowest to highest balance. Focus on one debt at a time, making minimum payments on others.
2. The avalanche method: Pay off debts from highest to lowest interest rate. Focus on high-interest debts first.
3. Emotional impact: Pay off debts based on emotional impact rather than quantitative factors. Prioritize debts that cause stress or tension.
Choose a method that works best for you and stick to it. Whether it’s the snowball method for quick wins, the avalanche method for saving money, or the emotional impact method for stress relief, the important thing is to make progress on your balances.
Start repaying your debt as soon as possible. Look for ways to reduce expenses and free up cash for debt payments. Take small steps now to make a big difference later on.
If you’re struggling to make progress on your debt, consider seeking alternatives like debt relief or credit counseling. An accountability partner can also help you stay on track with your debt repayment goals. Remember, paying down debt is a marathon, and having support can make a big difference in your journey. We made an estimation of the number of households by multiplying the total number of U.S. households by the percentage of households with credit card debt, based on data from the 2022 Survey of Consumer Finances.
To calculate household debt for each debt category, excluding credit card debt, we divided the average amount of each type of debt reported by the Federal Reserve Bank of New York by the number of households with that specific type of debt. Our estimation of the number of households was based on multiplying the total number of U.S. households by the percentage of households holding that particular debt, using data from the 2022 Survey of Consumer Finances.
Consumer price indexes (CPIs) track changes in prices for a range of consumer goods and services. The price indexes we examined cover various categories such as apparel, education and communication, food and beverage, housing, medical, recreation, and transportation. According to the U.S. Bureau of Labor Statistics, the overall price index grew from 256.43 to 314.686 between September 2019 and September 2024. To analyze the growth in price index categories in comparison with income growth since 2014, we forecasted a 2024 median household income based on the 2023 median reported income of $80,610, adjusting it quarterly using data from the Bureau of Labor Statistics’ Employment Cost Index for civilian workers. Census data indicates a median household income of $68,700 in 2019, while our projections suggest a median household income of $83,217 for 2024.
The U.S. Bureau of Labor Statistics reported that the price index of food and beverage, housing, and transportation increased between September 2019 and September 2024.
Additionally, the price index of all items rose from 237.477 to 314.686 between September 2014 and September 2024. Census data from 2014 shows a median household income of $53,660, whereas our projections indicate a median household income of $83,217 for 2024.
Please note that BW does not provide any warranties, express or implied, regarding the accuracy, reliability, or error-free nature of the information in this article. Use this information at your own risk, as completeness and accuracy are not guaranteed. The content of this article should not be considered indicative of the future performance of BW, its affiliates, or subsidiaries. Forward-looking statements may involve risks and uncertainties, as expressed by terms like “believes,” “expects,” “estimates,” “may,” “will,” “should,” or “anticipates.” These statements may differ materially from BW’s information presented to analysts and its actual operational and financial outcomes. following sentence using different words:
The dog ran quickly through the park.
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