For Debt.com’s second annual Credit Card Survey, there was good news and bad news – but the bad news really sticks out.
When comparing 2019’s results to 2018’s, Americans are doing better in several areas. For starters, 10 percent more are wisely searching for the lowest interest rate when shopping for a new credit card. Last year, 58 percent did that. This year, it’s up to 68 percent.
However, the greatest swing in responses came from a crucial question: How often do you hit your credit limit? With the Great Recession in the rearview mirror, you’d think fewer Americans would be bumping up against the most they can borrow. Sadly, that’s not the case.
In 2018, 64 percent of respondents never or rarely hit their credit limit. In 2019, it’s down to less than half – 49 percent. Below are the other results, based on responses from nearly 1,400 U.S. adults.
How many Americans use credit cards?
| Do you use credit cards? | |
|---|---|
| Yes | 84.56% |
| No | 15.44% |
What features do consumers look for when they shop for a credit card?
On a positive note, most consumers look for low interest rates when shopping for credit cards. The lower the interest rate the easier it is to pay off credit card debt. That’s because you can focus on the principal, not the interest charges for borrowing money.
| When you’re shopping for a credit card, what features do you look for? | |
|---|---|
| Lowest interest rate | 68.37% |
| Most cash back | 14.33% |
| Best rewards | 17.30% |
How many credit cards does the average American have?
Most Americans have more credit cards that financial experts recommend. The rule of thumb is to have only 2-3. However, Debt.com’s survey findings reveal most have more than that.
| How many credit cards do you have? | |
|---|---|
| 1 | 15.35% |
| 2 | 20.74% |
| 3-5 | 41.58% |
| 6-8 | 15.35% |
| 9-12 | 3.81% |
| More than 12 | 3.16% |
Do most people actively use all the cards they have?
Just because Americans have more credit cards than experts recommend, that doesn’t mean they use them. Our survey results show that most just keep them instead of actively charging up a balance.
| How many credit cards do you actively use? | |
|---|---|
| 1 | 31.94% |
| 2 | 32.50% |
| 3-5 | 31.56% |
| 6-8 | 3.35% |
| 9-12 | 0.19% |
| More than 12 | 0.47% |
Why do people use credit cards?
There is more than one reason why people use credit cards. Unfortunately, most survey respondents use them for the wrong type of spending – daily expenses and emergencies. It’s dangerous to do because emergencies always get more expensive and trap people in debt.
| What do you use your credit cards for? Check all that apply. | |
|---|---|
| Hotels | 51.64% |
| Airfare | 37.70% |
| Other travel costs | 33.77% |
| Restaurants | 61.18% |
| Home repairs | 29.65% |
| Medical expenses | 33.86% |
| Emergencies | 59.21% |
| Bills / covering budget gaps | 42.66% |
| Gifts | 42.75% |
| Shopping | 69.50% |
| Gas | 58.84% |
How much credit card debt does the average American have?
The average credit card debt per U.S. household is $5,700, according to financial data site ValuePenguin.[1] And when it drilled down on households that carry balances from month to month, that averages shoots up to $9,300.
But if you look only at households that carry credit card balances, that average jumps $9,300. Now our survey results show that nearly three-fifths (59%) of people have balances less than $5,000, and 44% owe $2,500 or less.
| What is your total current credit card debt? | |
|---|---|
| $0-$100 | 11.32% |
| $101-$500 | 11.23% |
| $501-$2,500 | 21.51% |
| $2,501-$5,000 | 15.38% |
| $5,001-$10,000 | 18.02% |
| More than $10,000 | 13.21% |
| More than $20,000 | 9.34% |
What is the average interest rate on your credit cards?
The national average credit card interest rate usually fluctuates between 16%-18% APR, according to CreditCards.com.[2] But if you use reward credit cards, your rates may often be more than 20% APR.
At the same time, if you have low interest rate credit cards, your average credit card rates could very well be in the 13%-15% range. A big shock is how many survey respondents who say their average rate is even lower.
| What do you think is the average interest rates on your credit cards? | |
|---|---|
| 0-5% | 6.33% |
| 6%-9% | 8.79% |
| 10%-12% | 13.42% |
| 13%-15% | 20.32% |
| 16%-20% | 26.47% |
| More than 20% | 24.67% |
How often do consumers go over their credit limit?
Maxing out your cards will hurt your credit score. A good rule of thumb is to keep your credit limit lower than 30%. It’s also bad to carry balances month to month. Unfortunately, the amount of respondents who never or rarely hit their credit limit has gone down by 15 percentage points since last year’s survey.
| Do you ever hit the credit limit on your credit cards? | |
|---|---|
| I never or rarely hit my credit limits | 49.01% |
| I have hit a limit in the past year | 16.84% |
| I have hit a limit in the past 6 months | 8.23% |
| I have hit a limit in the past 3 months | 14.29% |
| I hit my credit limit monthly | 11.64% |
Do people know about balance transfers?
Balance transfer credit cards can be used to consolidate credit card balances into one new one with a lower APR. Some even offer 0% APR introductory periods, which gives consumers the ability to pay off debt without interest.
| Have you ever used a balance transfer offer to consolidate debt? | |
|---|---|
| Yes | 38.45% |
| No | 61.55% |
Do people continue to use the cards that transferred the balance away from?
Most people stay away from using a credit card that they transferred their balance away from. Yet still, only by a small percent difference.
| On the card that you transferred the balance from, did you continue to use that card for purchases? | |
|---|---|
| Yes | 41.23% |
| No | 58.77% |
Do consumers use balance transfers the right way?
The bad news is that only a third of respondents have used a balance transfer for their credit card debt. However, the good news is they’re using them correctly. Roughly three out of five (61%) pay their balance off before the offer expired.
| Did you pay off the balance transfer before the teaser rate expired? | |
|---|---|
| Yes | 61.04% |
| No | 38.96% |
How often do Americans sign up for credit cards?
Constantly applying for new credit cards can raise red flags to banks and credit card companies. It can look as though your a risk to lend money to. On the other hand, keeping the same cards for too long without looking for better offers could leave you missing on some great new rewards and credit card offers.
The majority of our survey respondents seem to be in a good spot when it comes to how long they wait to sign up for new cards.
| When was the last time you signed up for a new credit card? | |
|---|---|
| Yesterday | 1.13% |
| Last month | 7% |
| In the past 2-6 months | 13.12% |
| In the past 7-12 months | 13.45% |
| In the past 13-18 months | 15.06% |
| It’s been over 2 years | 25.68% |
| It’s been over 5 years | 24.56% |
Which credit card company do Americans favor for customer service?
Customer service is important when dealing with any business, but especially when it can make the difference when disputing inaccurate charges or negotiating new credit lines or fees. Here are the credit card companies that our survey respondents felt were the best:
| Which credit card company has the best customer service? | |
|---|---|
| Capital One | 25.41% |
| Chase | 12.91% |
| Discover | 17.21% |
| Citibank | 4.95% |
| American Express | 7.55% |
| Bank of America | 5.11% |
| Wells Fargo | 3.17% |
| N/A | 31.98% |
Which credit card companies do Americans feel have the worst customer service?
We also asked in our survey which credit card companies consumers felt had the worst customer service. Here’s what they had to say:
| Which credit card company has the worst customer service? | |
|---|---|
| Capital One | 7.03% |
| Chase | 5.31% |
| Discover | 2.37% |
| Citibank | 3.76% |
| American Express | 3.10% |
| Bank of America | 9.31% |
| Wells Fargo | 10.29% |
| N/A | 58.82% |
Do people use credit monitoring services?
Nowadays there are so many different credit monitoring services to choose from. Some are free, like Credit Karma. Others are paid services, like LifeLock. We’re happy to see that more respondents are using these services than last year’s poll.
| Have you ever used a credit monitoring service? | |
|---|---|
| Yes | 59.66% |
| No | 40.34% |
Do consumers trust that their credit reports are accurate?
One out of every four credit reports have errors in them, according to a 2013 study conducted by the Federal Trade Commission.[3]
The congressional research also revealed that 1 in 5 Americans have inaccurate information in one of their credit reports that can drag down their credit score. Although it’s vital to regularly check your credit, most respondents believe the three credit bureaus correctly report their information.
| Do you believe that the information in your credit report is accurate? | |
|---|---|
| Yes | 53.59% |
| No | 12.99% |
| Not sure | 33.42% |
How often do consumers review their credit report?
Americans are able to review their credit for free once yearly through annualcreditreport.com.[4] It seems to be helping most of our poll respondents – they regularly check.
| When was the last time you reviewed your credit report? | |
|---|---|
| In the past six months | 54.07% |
| In the past year | 17.91% |
| In the past 2 years | 10.76% |
| In the past 5 years | 11.18% |
| Never | 6.08% |
Do consumers know that free credit reports are guaranteed by federal law?
Just because the government mandates programs doesn’t mean all Americans are aware of them. However, the majority of Debt.com’s survey respondents are aware that they legally can get their credit report yearly for free.
| Do you know that you can receive a free annual credit report guaranteed by federal law? | |
|---|---|
| Yes | 83.07% |
| No | 16.93% |
Methodology
Debt.com polled 1,408 U.S. adults online using SurveyMonkey. The survey was open from May 24, 2019 through July 15, 2019.
