That represents an improvement from 2023 when consumers added $111 billion in credit card debt and 2022 when they added nearly $120 billion in debt. Roughly $68 billion of credit card debt was added during the fourth quarter, which was 19% less than was added during the fourth quarter of 2023 when adjusted for inflation, said WalletHub.
Credit card finance charges increased by 1.5% during the fourth quarter on a year-over-year basis, totaling about $180 billion.
Preliminary data for January 2025 shows credit card debt increasing by 1% compared with January 2024. On an inflation-adjusted basis, total credit card debt is up 4% year over year compared with January 2024 but 9% below the all-time credit card debt record for the month set in 2007, the report said. Without adjusting for inflation Q4 outstanding credit card debt reached a record high.
Since the end of the Great Recession, consumer credit card debt performance has regressed on a year-over-year basis in more than half of all quarters, said WalletHub. The increase in credit card debt during Q4 2024 was about 0.56% larger than the post-Great Recession average for the fourth quarter of the year.
The credit card charge-off rate increased to 4.48% during the fourth quarter, up 2.52% from the same time last year, according to the report.
The ratio between total credit card debt and deposits was 7.4% in Q4 2024, 59% below the peak registered in Q4 2000 The ratio between total credit card debt and assets was 0.70% during the fourth quarter, 49% below its peak registered during the fourth quarter of 2002. In both cases, the lower the ratio is, the better, said WalletHub.
The report offered several tips for managing credit card debt, including making a budget, building an emergency fund, improving credit to decrease the cost of debt and repaying the most expensive debt first.
