October 2, 2023

Americans Have Less Credit Card Debt In 2021

Select’s editorial team works independently to review financial products and write articles we think our…

Americans Have Less Credit Card Debt In 2021

Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

In 2020, fewer Americans applied for credit cards as the COVID-19 pandemic kept people indoors, limited leisurely spending opportunities and even forced people to be more proactive about existing debt. And now data from earlier this year shows that Americans on average have actually decreased the amount of credit card debt they carry.

According to TransUnion’s Q2 2021 Industry Insights Report, credit card balances have decreased by 4.1% year-over-year. Reduced spending meant that consumers were able to put more money toward paying down revolving credit balances.

In fact, the average card balance among millennials declined to $4,277 this year — slightly less than the $4,471 average in 2020, according to TransUnion. A similar decline can also be seen among the Gen X and Baby Boomer generation; the average balance among Gen X’ers is now down to $6,359 from $6,919, and the average balance among Baby Boomers declined from $5,777 to $5,317.

Gen Z was actually the only generation to see a slight rise in their average credit card balance in the first half of 2021— the number rose slightly from $1,522 to $1,616.

Regardless of which generation you’re part of, paying down revolving debt like credit card debt can have positive impacts on your credit score, save you money on interest charges and allow you to free up more cash to use toward your other financial and lifestyle goals. Read on for some of Select’s tips for managing credit card spending.

Create a budget so you know how much you can comfortably charge to your credit card each month

Avoid using your credit card as an extension of your income

Consider using an interest-free balance transfer card to pay down your debt faster

Some credit cards allow you to transfer a balance from a previous, higher-interest card to pay down the amount you owe at 0% interest for a specified time. Not paying interest means that more of your monthly payment goes toward paying down the principal amount.

The amount of time you have to make interest-free payments toward a transferred balance will depend on the credit card, so be sure to read the terms carefully. The U.S. Bank Visa® Platinum Card, for example, charges 0% interest on balance transfers for 20 months (after, 14.49% – 24.49%). The 0% introductory APR applies to balance transfers made within 60 days of account opening.

They do, however, charge a balance transfer fee of 3% or $5, whichever amount is greater. But for more options, we’ve rounded up some other 0% APR credit cards that can help you finance your debt or new purchases.

U.S. Bank Visa® Platinum Card

On U.S. Bank’s secure site

  • Rewards

  • Welcome bonus

  • Annual fee

  • Intro APR

    0% for the first 20 billing cycles on balance transfers and purchases

  • Regular APR

  • Balance transfer fee

    Either 3% of the amount of each transfer or $5 minimum, whichever is greater

  • Foreign transaction fee

  • Credit needed

Here are some other credit cards you might consider

While the overall average decline in debt balances is a promising indicator that consumers have prioritized credit card management, the TransUnion report also indicates that the demand for new credit cards is also on the rise. The number of new accounts increased quarter-over-quarter by 1.79% — as of 2021, there are now 464.9 million credit accounts.

Select shopped around for some new additions (or first-time credit cards) that can help you earn cash back, take advantage of travel perks, invest for retirement and more. (See our methodology for more information on how we choose the best cards.)

Here are some of our picks:

But if you’re looking for even more options, check out our complete list of the best credit cards.

For rates and fees for the Discover it® Secured Credit Card, click here.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.