Debt
Visualizing America’s $1 Trillion Credit Card Debt
Visualizing America’s $1 Trillion Credit Card Debt
Americans’ collective credit card debt surpassed $1 trillion for the first time in Q2 2023.
Between April 1 and June 30, total credit card balances rose by $45 billion compared to Q1 2023, to $1.03 trillion.
This chart uses data from the Federal Reserve Bank of New York and WalletHub to illustrate the growing credit card debt in the United States.
Over $10,000 Balance per Household
After a sharp contraction in the first year of the pandemic, credit card balances have experienced seven consecutive quarters of year-over-year growth.
In Q2 2023, credit card balances saw the most significant increase among all debt types, including auto loans, student loans, and mortgages.
The average household credit card balance was $10,173.87 in June, $2,242.77 below the record set in Q4 2007.
As the Federal Reserve has increased interest rates at a record pace, banks have followed suit.
The average credit card charges around 21% interest rate on overdue payments, nearly five percentage points higher than in 2022.
Rising Balances May Present Challenges
Credit cards stand out as the most prevalent form of household debt in the U.S. and this prevalence is on an upward trajectory.
According to the Federal Reserve Bank of New York, credit card issuance has been steady over the last few years, averaging about 92 million newly issued cards each year between 2017 and 2019. The pandemic caused a sharp contraction in new credit card issuance, but lending returned across all credit score groups in 2021.
There are currently 70 million more credit card accounts open than in 2019. Approximately 69% of Americans now possess at least one credit card.
“American consumers have so far withstood the economic difficulties of the pandemic and post-pandemic periods with resilience,” New York Fed researchers wrote.
“However, rising balances may present challenges for some borrowers,” they added, “and the resumption of student loan payments this fall may add additional financial strain for many student loan borrowers.”
Money
Ranking the Credit Ratings of Major Economies
This graphic visualizes 30 country’s credit ratings, using data from the 2023 Sustainable Trade Index.
Ranking the Credit Ratings of Major Economies
Country credit ratings assess the likelihood that a country will default on its debts, and are determined by international rating agencies like Standard & Poor’s (S&P), Moody’s, and Fitch Ratings.
Generally speaking, a higher rating results in lower borrowing costs for the country, while lower ratings can increase costs or even limit access to capital.
This graphic from The Hinrich Foundation shows the credit worthiness of 28 major economies, using an index of ratings from the three agencies mentioned above (S&P, Moody’s, Fitch).
The analysis comes from the 2023 Sustainable Trade Index (STI), which the Hinrich Foundation produced in collaboration with the IMD World Competitiveness Center.
Data Overview
To produce the STI’s credit rating metric, ratings from S&P, Moody’s, and Fitch were converted to a numerical score and averaged for each economy, with a range of 0-60 (60 being the highest). All data are as of 2022.
| Rank | Economy | Index Value |
|---|---|---|
| 1 | 🇦🇺 Australia | 60 |
| 1 | 🇸🇬 Singapore | 60 |
| 3 | 🇨🇦 Canada | 59 |
| 3 | 🇺🇸 United States | 59 |
| 5 | 🇳🇿 New Zealand | 57 |
| 6 | 🇹🇼 Taiwan | 54 |
| 7 | 🇭🇰 Hong Kong | 53 |
| 7 | 🇰🇷 South Korea | 53 |
| 9 | 🇬🇧 United Kingdom | 52 |
| 10 | 🇨🇳 China | 48 |
| 11 | 🇯🇵 Japan | 47 |
| 12 | 🇨🇱 Chile | 45 |
| 13 | 🇲🇾 Malaysia | 41 |
| 14 | 🇵🇪 Peru | 39 |
| 14 | 🇹🇭 Thailand | 39 |
| 16 | 🇵🇭 Philippines | 37 |
| 17 | 🇮🇩 Indonesia | 36 |
| 17 | 🇲🇽 Mexico | 36 |
| 19 | 🇮🇳 India | 33 |
| 20 | 🇻🇳 Vietnam | 26 |
| 21 | 🇧🇩 Bangladesh | 24 |
| 22 | 🇰🇭 Cambodia | 18 |
| 23 | 🇵🇬 Papua New Guinea | 17 |
| 24 | 🇪🇨 Ecuador | 12 |
| 25 | 🇵🇰 Pakistan | 8 |
| 26 | 🇱🇦 Laos | 6 |
| 27 | 🇱🇰 Sri Lanka | 4 |
| 28 | 🇷🇺 Russia | 1 |
Countries with advanced economies and stable political structures typically receive the highest credit ratings, but this is always subject to change. For example, in August 2023, Fitch Ratings announced it had downgraded the U.S. to an AA+ from AAA (the highest possible).
From Fitch’s press release:
The rating downgrade of the U.S. reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.
Speaking of downgrades, one country that has received numerous in recent years is Russia, due to sanctions it faces as a result of the prolonged invasion of Ukraine. For example, S&P reduced Russia’s sovereign credit rating to a CCC-, which implies a default is imminent in the near future.
Explore the Sustainable Trade Index
This infographic was just a preview of what the Sustainable Trade Index has to offer. To learn more, visit The Hinrich Foundation, where you can download additional resources including the entire report for free.
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