A new Debt.com survey shows many rely on credit cards due to price hikes and rising costs from inflation.
Two years of a record-high inflationary period and multiple Federal Reserve interest rate hikes have caused Americans to fall further into credit card debt.
Debt.com polled more than 1,000 U.S. adults on their credit card use. The majority say since credit card interest rates have soared so fast the majority of survey respondents (28%) can’t tell you what their average APR is. When asked if they considered various debt solutions – from credit counseling to debt settlement or even a balance transfer – 58% hadn’t.
“It’s one thing to identify the enemy, it’s quite another to conquer it,” says Debt.com’s chairman Howard Dvorkin. “Yet our survey also revealed some concerns that will keep us dependent on our plastic.”
“You can’t get out of debt if you don’t understand what’s keeping you there,” Dvorkin said about those cardholders who don’t even know how much interest they’re paying each month. “And you certainly can’t get out of debt if you don’t even know the options you have.”
Here are the main takeaways from the survey:
- More than 3 in 10 say they’ve maxed out their credit cards over the past two years
- More than 4 in 10 says inflation has caused them to use credit cards to make ends meet
- Half “carry a larger monthly credit card balance” due to inflation
Price hikes from inflation have caused half of respondents to rely on credit cards
Inflation has caused half of respondents to carry a larger monthly credit card balance
Nearly 3 in 10 don’t know how much their average credit card APR is
Aside from inflation, many have taken on more debt due to a reduction in their income
3 in 5 says they’ve “never explored solutions to help with their credit card debt”
We’re using fewer credit cards, we’re charging less on them, and many Americans say that’s permanent.
During the pandemic, many studies and polls showed that Americans were spending less money and worrying more about their debts. A recent Debt.com/Her Money survey even suggested some of these changes might linger long after COVID-19 is just a bad memory.
In a nationwide survey with 1,000 respondents, 42 percent believe Americans have “learned how much credit cards cost in interest and fees and will permanently cut back.” Even further, compared to 2019 – the last time Debt.com ran this poll – 8 percent more said they “never or rarely hit their credit card limits.”
As expected, fewer Americans currently use credit cards at hotels and restaurants than two years ago. How much? Twenty percent less used their credit cards at hotels and 16 percent less charged restaurant meals on plastic.
What may come as a surprise: Last year, an estimated 95 percent of the population was ordered to shelter at home. But only 11 percent fewer Americans said most their credit card spending is on airfare compared to 2019.
Below are the most interesting findings from the survey…
The vast majority of respondents use credit cards
The majority believe Americans will cut back on credit card spending when the pandemic ends
One in five carry a balance between $0 and $100
More than half never – or rarely – hit the limit on their credit cards
Most respondents said they have three to five credit cards
| Do you use credit cards? | Percentage of respondents |
| No | 10.26% |
| Yes | 89.74% |
| When you’re shopping for a credit card, what features do you look for? | Percentage of respondents |
| Best rewards | 16.47% |
| More cash back | 18.96% |
| Lower interest rate | 64.57% |
| How many credit cards do you have? | Percentage of respondents |
| More than 12 | 2.32% |
| Nine to 12 | 4.03% |
| Six to eight | 12.30% |
| Two | 22.68% |
| One | 23.69% |
| Three to five | 34.98% |
| How many credit cards do you actively use? | Percentage of respondents |
| More than 12 | 0.20% |
| Nine to 12 | 0.50% |
| Six to eight | 2.83% |
| Three to five | 25.93% |
| Two | 26.84% |
| One | 43.69% |
| Have Americans learned to use credit card sparingly since the pandemic? | Percentage of respondents |
| I don’t know | 25.08% |
| As soon as the pandemic ends, we’ll run up bills at restaurants and retailers | 33.40% |
| I believe we’ve learned how much interest and fees cost. We’ll permanently cut back | 41.52% |
| What do you use your credit cards for? | Percentage of respondents |
| Other travel costs | 22.13% |
| Home repairs | 24.65% |
| Airfare | 26.46% |
| Medical expenses | 30.08% |
| Hotels | 31.29% |
| Gifts | 33.90% |
| Bills/covering budget gaps | 36.92% |
| Restaurants | 45.67% |
| Gas | 49.90% |
| Emergencies | 51.31% |
| Shopping | 60.76% |
| What is your total current credit card debt? | Percentage of respondents |
| More than $20,000 | 10.53% |
| $101 to $500 | 10.83% |
| More than $10,000 | 10.93% |
| $5,001 to $10,000 | 12.84% |
| $2,501 to $5,000 | 16.05% |
| $501 to $2,500 | 17.85% |
| $0 to $100 | 20.96% |
| What do think the average interest rates on your credit cards are? | Percentage of respondents |
| 0 to 5 percent | 8.03% |
| 6 to 9 percent | 10.84% |
| 10 to 12 percent | 12.45% |
| 13 to 15 percent | 17.17% |
| More than 20 percent | 21.49% |
| 16 to 20 percent | 30.02% |
| Do you ever hit the limit on your credit cards? | Percentage of respondents |
| I have hit a limit in the past six months | 6.26% |
| I have hit a limit in the past three months | 7.68% |
| I hit my credit limit monthly | 8.79% |
| I have hit a limit in the past year | 19.49% |
| I never or rarely hit my credit limits | 57.78% |
| Have you ever used a balance transfer offer to consolidate debt? | Percentage of respondents |
| Yes | 37.07% |
| No | 62.93% |
| On the card you transferred the balance from, did you continue to use that card for purchases? | Percentage of respondents |
| Yes | 42.12% |
| No | 57.88% |
| Did you pay off the balance transfer before the teaser rate expired? | Percentage of respondents |
| No | 38.90% |
| Yes | 61.10% |
| When was the last time you signed up for a new credit card? | Percentage of respondents |
| Yesterday | 1.91% |
| Last month | 8.79% |
| In the past 13 to 18 months | 11.23% |
| In the past seven to 12 months | 13.56% |
| In the past two to six months | 15.25% |
| It’s been over five years | 22.35% |
| It’s been over two years | 26.91% |
| Which credit card company has the best customer service? | Percentage of respondents |
| Wells Fargo | 1.91% |
| Citibank | 4.13% |
| Bank of America | 4.56% |
| American Express | 9.64% |
| Chase | 11.97% |
| Discover | 14.72% |
| Capital One | 23.73% |
| Not applicable | 29.34% |
| Which credit card company has the worst customer service? | Percentage of respondents |
| Citibank | 3.50% |
| Discover | 3.61% |
| American Express | 4.56% |
| Chase | 5.52% |
| Capital One | 6.79% |
| Wells Fargo | 11.25% |
| Bank of America | 13.16% |
| Not applicable | 51.59% |
| Have you ever used a credit monitoring service? | Percentage of respondents |
| Yes | 39.26% |
| No | 60.74% |
| Do you believe that the information in your credit report is accurate? | Percentage of respondents |
| No | 21.27% |
| Yes | 78.73% |
| When was the last time you reviewed your credit report? | Percentage of respondents |
| Never | 5.93% |
| In the past five years | 6.24% |
| In the past two years | 10.48% |
| In the past year | 18.10% |
| In the past six months | 59.26% |
| Do you know that you can receive a free annual credit report guaranteed by federal law? | Percentage of respondents |
| No | 15.56% |
| Yes | 84.44% |
Methodology: Debt.com surveyed 1,003 people and asked 19 questions about their credit card spending. People responded from all 50 states and Washington, DC and were aged 18 and above. Responses were collected through SurveyMonkey. The survey was conducted from Jan. 17, 2021 to March 22, 2021.
Debt.com’s 2018 credit card survey
Credit cards are extremely convenient, but they also have the potential to create serious debt problems for consumers when they’re not used correctly. According to the Federal Reserve Bank of New York, revolving debt topped $1 trillion at the end of last year, and most of that debt comes from credit cards. Experts warn that this could spell trouble for consumers if the economy takes a turn. But at least for now credit card delinquency rates are falling.
So, to find out what’s really true when it comes to consumers and credit cards, Debt.com and Money Talks News partnered up to conduct a nationwide survey of over 4,500 U.S. adults to ask about their perspectives on credit cards and credit card debt. Out of the responses, two risky bad credit habits stood out:
Full credit card survey results
Below you can find the full results to all the questions from Debt.com’s 2018 Credit Card Survey.
How many Americans use credit cards?
Following the Great Recession, some experts predicted that credit card use would become less popular, especially among Millennials. However, according to our findings, most Americans still believe in the power of their plastic.
| Do you use credit cards? | |
|---|---|
| Yes | 84.86% |
| No | 15.14% |
What features do consumers look for when they shop for a credit card?
The good news is that when consumers shop for a new credit card, most focus on the right thing: low interest rates. A low rate makes it easier to pay of credit card debt because more of each payment goes to elimiante principal, rather than accured interest charges.
| What is the main feature you look for when you shop for a new credit card? | |
|---|---|
| Lowest interest rate | 58.11% |
| Most cash back | 20.28% |
| Best rewards | 21.61% |
How many credit cards does the average American have?
Most experts recommend that you really only need 2-3 credit cards because any more than that creates too much potential for debt problems. However, Debt.com’s findings show that the marjority of people may have more accounts than they really need.
| How many credit cards do you have? | |
|---|---|
| 1 | 13.46% |
| 2 | 22.97% |
| 3-5 | 43.95% |
| 6-8 | 13.15% |
| 9-12 | 3.99% |
| More than 12 | 2.48% |
Do most people actively use all the cards they have?
While many Americans have more cards than most experts would recommend, that doesn’t mean that they’re actively using all those cards. In reality, only a few cards are actively used, even when a person has a wallet full of plastic.
| How many credit cards do you actively use? | |
|---|---|
| 1 | 33.01% |
| 2 | 34.93% |
| 3-5 | 28.32% |
| 6-8 | 2.71% |
| 9-12 | 0.74% |
| More than 12 | 0.28% |
Why do people use credit cards?
Credit cards don’t just serve one purpose, and as a result, credit card use has become an integral part of our daily lives. In some cases, they may be used strategically. But unfortunately, they often get used to cover daily expenses and emergencies. This type of use can be dangerous because unexpected expenses always inevitably arise.
| What do you use your credit cards for? Check all that apply. | |
|---|---|
| Hotels | 57.69% |
| Airfare | 47.98% |
| Other travel costs | 45.30% |
| Restaurants | 65.00% |
| Home repairs | 40.97% |
| Medical expenses | 40.61% |
| Emergencies | 58.43% |
| Bills / covering budget gaps | 38.83% |
| Gifts | 52.18% |
| Shopping | 76.67% |
How much credit card debt does the average American have?
According to our friends at ValuePenguin, the average credit card debt per household is $5,700. But if you only at households that carry credit card balances, that average jumps $9,300. But according to Debt.com’s results, nearly two thirds (66%) of people we polled had balances of less than $5,000 and almost 40% had a balances of $1,000 or less.
| What is your total current credit card debt? | |
|---|---|
| $0-$100 | 21.95% |
| $101-$500 | 8.89% |
| $501-$1,000 | 8.79% |
| $1,001-$3,000 | 15.62% |
| $3,001-$5,000 | 10.25% |
| $5,001-$10,000 | 13.35% |
| $10,001-$15,000 | 7.46% |
| $15,001-$20,000 | 4.30% |
| $20,001-$25,000 | 2.92% |
| $25,001-$30,000 | 1.36% |
| $30,001-$35,000 | 1.28% |
| $35,001-$40,000 | 1.02% |
| $40,001-$45,000 | 0.44% |
| $45,001-$50,000 | 0.63% |
| $50,001-$100,000 | 0.31% |
What is the average interest rate on your credit cards?
According to CreditCards.com, the national average credit card interest rate usually fluctuates between 16-18% APR. But if you use reward credit cards, your rates may often be over 20% APR. At the same time, if you have low interest rate credit cards, then your average creidt card rates could easily be in the 13-15% range. What’s suprising is the number of respondents that reported their average rate was even lower than that. Either these respondents have extremely good credit and negotiating skills for getting lower rates, or this may show that many people underestimate how much credit really costs them.
| What do you think is the average interest rates on your credit cards? | |
|---|---|
| 0-5% | 7.37% |
| 6-9% | 10.58% |
| 10-12% | 16.98% |
| 13-15% | 21.60% |
| 16-20% | 26.52% |
| Over 20% | 16.95% |
How often do consumers go over their credit limit?
Hitting your credit limit is bad for your debt and your credit score. In general, utilizing anymore than 30% of an available credit limit is bad for your score. Ideally, you really don’t want to carry balances over month to month. But we were pleased to see that almost a third of survey respondents never or rarely get close to their credit limits.
| Do you ever hit the credit limit on your credit cards? | |
|---|---|
| I never or rarely hit my credit limits | 64.20% |
| I have hit a limit in the past year | 12.57% |
| I have hit a limit in the past 6 months | 4.98% |
| I have hit a limit in the past 3 months | 9.95% |
| I hit my credit limits every month | 8.30% |
Do people know about balance transfers?
Balance transfer credit cards allow a consumer to consolidate existing credit card balances on a new card with lower APR. Often, these credit cards offer 0% APR introductory periods where you can pay off debt interest-free.
| Have you ever used a balance transfer to consolidate debt? | |
|---|---|
| Yes | 35.20% |
| No | 64.80% |
Do consumers use balance transfers the right way?
While only more than a third of respondents have used a balance transfer, the good news is that the majority use them correctly. That means paying off the balance in full before the end of the 0% APR teaser rate.
| Did you pay off the balance transfer before the teaser rate expired? | |
|---|---|
| Yes | 67.66% |
| No | 32.34% |
How often do Americans sign up for credit cards?
When it comes to using credit strategically, there’s a sweet spot when it comes to shopping for credit. You don’t want to constantly shop for new cards because it creates a risk for too much debt. On the other hand, you don’t want to use your cards for decades without shopping around. You could miss out on new reward programs and features. But at least with our respondents, shopping for new credit is a rarity.
| When was the last time you signed up for a new credit card? | |
|---|---|
| Yesterday | 0.74% |
| Last month | 6.40% |
| In the past 2-6 months | 11.08% |
| In the past 7-12 months | 11.72% |
| In the past 13-18 months | 11.92% |
| It’s been over 2 years | 23.05% |
| It’s been over 5 years | 35.07% |
Do people use credit monitoring services?
Credit monitoring services allow consumers to track changes in their credit score and review their credit reports more regularly. There are paid services, like LifeLock, and free services, like Credit Karma. But do people really use these services to strategically build credit?
| Have you ever used a credit monitoring service? | |
|---|---|
| Yes | 46.48% |
| No | 53.52% |
Do consumers trust that their credit reports are accurate?
A 2013 FTC study found that one in four credit reports contain an error and one in five have an error that would hurt a consumer’s credit score. That’s why it’s so important to review your credit often. Unfortunately, most people seem to trust the bureaus to get it right.
| Do you believe that the information in your credit report is accurate? | |
|---|---|
| Yes | 57.46% |
| No | 10.69% |
| Not sure | 31.85% |
How often do consumers review their credit report?
With free annual credit reports through annualcreditreport.com, consumers can review their credit without any strings attached once per year. And the majority of the people we polled stay on top of their credit.
| When was the last time you reviewed your credit report? | |
|---|---|
| In the past six months | 50.26% |
| In the past year | 20.41% |
| In the past 2 years | 11.43% |
| In the past 5 years | 12.14% |
| Never | 5.76% |
Do consumers know that free credit reports are guaranteed by federal law?
Often the biggest problem with government mandated programs is that consumers don’t know they exist. It’s the reason that the Government Accountability Office says that over half of student loan borrowers may be overpaying. But when it comes to knowing about free credit reports, most consumers are in the know.
| Do you know that you can receive a free annual credit report guaranteed by federal law? | |
|---|---|
| Yes | 85.99% |
| No | 14.03% |
Methodology
Debt.com partnered with Money Talks News to poll 4,462 U.S. adults online using SurveyMonkey. The survey was open from June 19, 2018 to July 9, 2018.
Source:
Methodology: Debt.com surveyed more than 1,000 Americans and asked six questions about their credit card spending during an inflation surge from 2021 to 2023. People responded from all 50 states and Washington, DC and were aged 18 and above. Responses were collected through SurveyMonkey. Percentages were rounded up to the nearest whole number and might not total 100 percent.